BIR Ruling [UN-220-95]

June 15, 1995 BIR RULING [UN-220-95] Ms. Cora C. Solis Chief, Accounting Division National Center For Mental Health Mandaluyong, Metro Manila M a d a m : This refers to your letter dated June 8, 1993 relative to the internal revenue tax case of the National Center For Mental Health, Mandaluyong City, involving the total amount of P41,247.65 under Assessment Notice Nos. 7.50 A-0060-89-92 and 7.50 A-0059-89-92 both dated November 4, 1992 representing penalties for late remittance of the withholding tax on government money payments for July 1989. In a letter dated June 8, 1993, you alleged that prior to 1990, your agency set-up had the Cashier's Office in charge of the preparation of your Office's remittances; that although, personally charged to withhold taxes and remit the same to the Bureau of Internal Revenue, you have no direct supervision and control over the Cashier's Office, that it was only in 1990, that the preparation of remittances was transferred and placed under your responsibility; and that from thereon, records will show that your remittances of withholding tax on government money payments has been on time. In connection therewith, you are requesting for a condonation of your aforesaid tax liabilities. In reply thereto, please be informed that pursuant to Section 247 (b) of the Tax Code, as amended if the withholding agent is the Government or any of its agencies, political subdivisions or instrumentalities, or a government-owned or controlled corporation, the employee thereof responsible for the withholding and remittance of the tax shall be personally liable for the additions to the tax prescribed herein. Accordingly, as the Chief, Accounting Division, or Chief Accountant of the National Center For Mental Health, you are personally liable for the penalties prescribed for late payment and remittance of the withholding tax on government money payments for July, 1989 under Chapter 1, Title X of the Tax Code, as amended. Such being the case, your request cannot be granted for lack of legal basis. Pursuant to Section 2 of the Revenue Regulations No. 5-85, taxes deducted and withheld on income payments subject to the creditable withholding taxes shall be remitted within ten (10) days after the end of each calendar month with the filing of the appropriate returns. Moreover, taxes deducted and withheld by the withholding agent shall be held as a special fund in trust for the Government until paid to the collecting officers. (Sec. 51, Tax Code, as amended). The imposition of surcharge and interest is but a just compensation to the state for the delay in paying the tax and for the concomitant use by the taxpayer of funds that rightfully should be in the hands of the government. (Central Bank vs. Collector of Internal Revenue, 6 SCRA 886). In view of the foregoing, you are requested to pay the total amount of P41,247.65 for late remittance of the withholding tax on government money payments for July, 1989 within ten (10) days from receipt hereof, otherwise, this Office will enforce collection thereof through the summary remedies prescribed by law. cdtech This constitutes the final decision of this Office on the matter. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue