Regulations Implementing EO No. 651

April 2, 1987 REVENUE REGULATIONS NO. 01-87 SUBJECT : Regulations Implementing Executive Order No. 651 Requiring Government Offices, Agencies and Instrumentalities to Comply Strictly with the Laws and Regulations on Withholding of Taxes, Designating the Appropriate Withholding Agents For Such Purpose, and Fixing Official Responsibility Therefore TO : All Internal Revenue Officers, Withholding Agents and Others Concerned Pursuant to Executive Order No. 651 and relevant revenue laws and in accordance with Section 4 in relation to Section 277 of the National Internal Revenue Code of 1977, as amended, these regulations are hereby promulgated to govern the manner of withholding and remittance of internal revenue taxes due on account of money payments by government offices and agencies, constituting the appropriate withholding agents for such purpose, and fixing official responsibility therefor. SECTION 1 . Internal Revenue taxes to be withheld . The following internal revenue taxes are to be withheld from money payments by government ministries, bureaus, offices, agencies, and instrumentalities of the Republic of the Philippines, provincial, city, and municipal government, government-owned and controlled corporations, and all government offices: (a) Withholding tax on compensation income; (b) Withholding of creditable income tax on certain amounts payable or paid to resident payees under the Expanded Withholding Tax System; (c) Withholding of final income tax; (d) Withholding tax on government money payments pursuant to Republic Act No. 1051; (e) Any other internal revenue taxes required to be withheld by law or regulations. SECTION 2 . Offices required to deduct and withhold . (a) The Provincial Treasurer in provinces, the City Treasurer in cities, the Municipal Treasurer in municipalities, the Chief Accountant in ministries, bureaus, agencies instrumentalities, government-owned or controlled corporations, and other government offices are personally charged with the duty to withhold and remit the taxes due from the said payees on account of such money payments. The responsibility and liability of the respective Treasurers, Chief Accountants, pursuant to and under these regulations, may not be delegated to subordinate officials or employees. cd (b) The names of the incumbents of such positions shall be submitted by the head of the office concerned to the Commissioner of Internal Revenue within thirty (30) days from receipt by such office of notification requiring such information, and any change of such incumbents shall be reported and the names of the replacements submitted within ten (10) days from such change or replacement. (c) Any public officer or employee presently charged with the responsibility to withhold and remit taxes, but who does not qualify under these regulations, shall be promptly replaced by qualified officers or employers and their designation submitted to the Commissioner of Internal Revenue, thru the Withholding Tax Division, within the period prescribed in these regulations. SECTION 3 . Liability of designated officers . (a) Additional to the Tax . The Treasurers and Chief Accountants designated with the duty to withhold and remit taxes withheld in their respective offices, under these regulations shall be personally liable for the additions to the tax prescribed in Chapter I, Title XI of the NIRC as amended. (b) Penalties . Every officer or employee of the government of the Republic of the Philippines or any of its agencies and instrumentalities, its political subdivisions as well as government-owned or controlled corporations including the Central Bank who, under the provisions of the Tax Code or regulations promulgated thereunder, is charged with the duty to deduct and withhold any internal revenue tax and to remit the same in accordance with the provisions of the Tax Code and other laws, shall be fined in a sum of not less than five thousand pesos but not more than fifty thousand pesos of imprisoned for a period of less than six months and one day but not more than two years, or both, if convicted and found guilty of any of the offenses hereinafter specified: "1. Those who fail or cause the failure to deduct and withhold any internal revenue tax under any of the withholding tax laws and implementing regulations; "2. Those who fail or cause the failure to remit taxes deducted and withheld within the time prescribed by law and implementing regulations; and "3. Those who fail or cause the failure to file return or statement within the time prescribed, or render or furnish a false or fraudulent return or statement required under the withholding tax laws and regulations. cdt SECTION 4 . Repealing Clause . All existing rules and regulations or parts thereof which are inconsistent with the provisions of these regulations are hereby revoked. SECTION 5 . Effectivity . These regulations shall take effect immediately. JAIME V. ONGPIN Secretary of Finance Recommended by: (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue