Supplementary Order to Revenue Memorandum Order No. 7-82

April 12, 1982 REVENUE MEMORANDUM ORDER NO. 11-82 SUBJECT : Supplementary Order to Revenue Memorandum Order No. 7-82 TO : All Revenue Regional Directors, Revenue District Officers and Others Concerned Under Revenue Memorandum Order No. 7-82, the following are directed to be undertaken immediately. 1. Listing of Withholding Agents . - To facilitate the registration of all old and new withholding agents (employers who are also withholding for creditable and final taxes as well as business and miscellaneous taxes on money payments), Revenue District Officers are hereby authorized to issue identification number which will comprehend his district and region, thus: WT-23-4A-00001 for a withholding agent in Revenue District No. 23 of Region 4A. Applications shall now all be filed with the proper Revenue District Office, including those filed by withholding agents within Metro Manila. acd To avoid duplication of ID numbers, the withholding agent whose registration will be renewed shall be required to indicate his old number on the application (W-5) in parenthesis to distinguish it from the new ID number. In case of transfer of a duly registered withholding agent from one district to another, the Revenue District Office in which it is registered shall cancel the ID number upon receipt of the notice of transfer. The withholding agent must apply for a new ID number in the Revenue District Office of the city or municipality to which it has transferred. In accordance with the Order above-cited, the original copy of the application for ID number shall be forwarded to the Withholding Tax Division for transmittal to the Data Processing Center. 2. Verification and Monitoring of Performance of Withholding Agents . - A. Sampling Survey - 1) Objective . - To obtain fast and accurate information on the degree of compliance with the withholding tax law and regulations on compensation income to serve as the basis for remedial measures, if warranted, considering the critical implementation implications of the modified gross income taxation scheme. The survey will also inculcate upon withholding agents the thrust of the Office to monitor currently and closely their withholding tax compliance. cd 2) Scope . - Each Revenue District Officer is directed to conduct the survey of at least twenty per cent (20%) of the listed and unlisted employers within his district. As much as practicable, the employers to be covered shall be drawn equally from the public and private sectors. 3) Requirements . - (a) Letter-request - The survey shall be covered by a letter-request to the employer, specifying the purpose, and the documents to be verified, sample copy of which is attached. The pertinent papers to be looked into are: Employee's Withholding Exemption Certificate and Employer's Compensation Payment Certificate (W-4); Vouchers issued in paying wages; Payrolls for regular and supplementary wages, Books of Accounts; Monthly and quarterly returns and statements with corresponding revenue official receipts or confirmation receipts. (b) Every item (I-X) of the Survey Report on Withholding Tax on Compensation Income shall be correctly accomplished by the examiner conducting the survey. The items for which information is desired are so interrelated to bring about the total measurement of the compliance of an employer with the withholding tax laws and regulations: I. Status - If the employer is registered as a withholding agent, the appropriate box shall be checkmarked and the corresponding ID number indicated. II. Type of Organization - The box for "others" shall be checkmarked if the organization is an exempt organization from taxes, but nevertheless an employer required to deduct and withhold. aisa dc With respect to government entities, the additional information as to whether the public officer or employee designated to withhold and remit tax is registered as required shall also be indicated. III. Period Covered . - The survey will be limited to three months, January, February and March, 1982. IV. Number of Employees - For purposes of this survey, the employers are classified into three (3) groups depending upon the number of employees, and the survey shall be spread as representative as possible among the three (3) groups of employers with less than 100 employees, more than 100 but not more than 500 employees, and more than 500 employees. V. Rank of Employee - The verification shall be limited to three (3) employees, the first, from top management, the second, from the middle management, and the third, from the rank and file. VI. Items of Compensation - The items of regular and supplementary wages are separately listed. Both payrolls for regular and supplementary wages should be looked into to determine the wages being paid. If employee A is not being paid a certain item of compensation, checkmark the space under the column "no payment". If the item of compensation has been included in the amount of wages subjected to withholding, compute if the amount withheld is correct, and checkmark the space under "Subjected to Correct Withholding" as "Subjected to Incorrect Withholding" as the case may be. On the other hand, if the compensation was not subjected to withholding at all, checkmark the space under the column "Not subjected to withholding. VII. 1981 Treatment of Transportation and Representation Allowances - If verification for the period under survey discloses that there are no payments of fixed transportation and representation allowances because they are considered reimbursable, determine the treatment in 1981 whether they were fixed or reimbursable allowances and checkmark the appropriate box. cdt VIII. Amount of Withholding Tax on Wages per Month - Determine the amount of taxes withheld for the three (3) months of the quarter from the return (W-1) and revenue official receipts or confirmation receipts. IX. Remittance - Ascertain if the remittance per month or quarter is "always prompt", "sometimes late", "always late" or "no remittance" from the dates of the quarterly return and revenue official receipt or confirmation receipt. X. Filing of Revised W-4 - Compliance, for purposes of this survey, refers to the accomplishment of "Employee's Withholding Exemption Certificate" and the "Compensation Payment Certificate". The document may have been filed late, but it can still be considered as filed correctly. (c) The survey report shall be accomplished in duplicate. The original copy shall be submitted to the Withholding Tax Division not later than June 30, 1982 , and the duplicate copy retained for file. B. Submission of Report of Collection from Withholding Taxes . - The report for the first quarter, 1982, is due May 10th, and every 10th day of the second month after the close of each quarter: 1) Withholding tax on wages (W-1) - P _______ 2) Expanded withholding tax (1743A) - P _______ 3) Final withholding tax (1743C & 1745) - P _______ 4) Withholding tax on money payments (7.50) - P _______ RUBEN B. ANCHETA Acting Commissioner