RMC No. 23-2012: Reiterates the responsibilities of officials and employees of government offices for the withholding of applicable taxes on certain income payments and the imposition of penalties for non-compliance thereof

Key points

1. Withholding agent duties. The government office must register as a withholding agent. The agent must withhold the correct amount of tax, remit it on time, issue certificates of taxes withheld, and do the year-end adjustment.
2. Employee forms and returns. Employees submit BIR Form No. 1902 (newly hired) and BIR Form No. 2305 (change in exemption) within 10 days from start of employment or the change, per Section 2.79.1 of RR No. 2-98, as amended. The office submits these to the Revenue District Office within 30 days from receipt, and files the annual information return and alphabetical lists of employees/payees, if applicable.
3. Additions to the tax. Non-withholding, under-withholding and non-remittance bring collection of the amount involved plus 20% interest, under Sections 251 and 249 of the Tax Code. Late remittance brings a 25% surcharge and 20% interest, under Sections 248 and 249. Failure to refund excess taxes withheld on compensation and to do the year-end adjustment falls under Sections 252 and 275.
4. Criminal liability. Criminal liability also applies for violations under Sections 255, 256, 272 and 275 of the Tax Code. Under RMO No. 19-2007, a compromise penalty may be imposed instead in certain instances.

Who is affected

• Government withholding agents and their accountable officers
• Government officials and employees identified in RMO No. 8-2003

Deadlines and effectivity

• Forms 1902 and 2305: within 10 days from start of employment or change in exemption
• Submission to the Revenue District Office: within 30 days from receipt