Publishing the Full Text of DILG Circular No. 99-151

September 25, 2001 REVENUE MEMORANDUM CIRCULAR NO. 40-01 SUBJECT : Publishing the Full Text of Department of the Interior and Local Government (DILG) Circular No. 99-151 dated August 14, 1999 Re: Implementation of the Withholding Tax System TO : All Internal Revenue Officers, Employees and Others Concerned For the information and guidance of all revenue officials and employees, quoted hereunder is the DILG Circular No. 99-151, dated August 24, 1999 requiring the strict implementation of the Withholding Tax System: "REPUBLIC OF THE PHILIPPINES DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT Francisco Gold Condominium II Bldg. EDSA cor. Mapagmahal St.,Diliman, Quezon City MEMORANDUM CIRCULAR No. 99-151 TO : ALL PROVINCIAL GOVERNORS, CITY MAYORS, MUNICIPAL MAYORS, PROVINCIAL, CITY AND MUNICIPAL TREASURERS, DILG REGIONAL- DIRECTORS AND OTHERS CONCERNED SUBJECT : IMPLEMENTATION OF THE WITHHOLDING TAX SYSTEM This refers to Republic Act No. 8424 otherwise known as the Tax Reform Act of 1997. Pursuant to the said law and its implementing Revenue Regulations No. 2-98, as well as, other internal revenue laws and regulations all government offices are required to deduct and withhold taxes from the compensation paid to their employees, income payments subject to the expanded withholding tax, income payments subject to final withholding tax and payments made to VAT and Non-VAT sellers of goods and services, whether individual or corporate. Relative to the above, and. as per information from the Bureau of Internal Revenue, it appears that, for the past years, there has been a limited compliance, or non-compliance, with withholding tax laws and regulations by a large number of local government units thereby resulting into a relatively low tax collection. In view thereof, and in support of overall efforts to improve tax collection, all Provincial Governors, City Mayors and Municipal Mayors, and their Treasurers are hereby enjoined to strictly implement withholding tax laws and regulations, and are reminded of their responsibilities as withholding tax agents as provided for under Revenue Memorandum Order No. 14-98 and Revenue Memorandum Order No. 70-98. All concerned officers in charge of withholding taxes are hereby advised that failure to comply with the said requirements is subject to administrative and penal liabilities as provided for by law. Furthermore, Provincial Governors, City Mayors and Municipal Mayors are encouraged to provide full support to the BIR Regional Directors, Revenue District Officers and Withholding Agents Monitoring Division Personnel in the conduct dialogues, seminars or field verification efforts among local authorities. All DILG Regional Directors are likewise hereby directed to help disseminate this Memorandum Circular to all local government units within their jurisdictions, and to provide technical assistance, as appropriate and where necessary. For the information and guidance of all concerned. (SGD.) RONALDO V. PUNO Secretary Attested by: (SGD.) Dr. EULOGIO R. MAGSAYSAY HEAD EXECUTIVE ASSISTANT" All revenue officers and employees are enjoined to give this Circular as wide a publicity as possible. (SGD.) RENE G. BAEZ Commissioner of Internal Revenue