The Bureau of Internal Revenue (BIR) is reminding government offices, including the barangays, that the withholding Value Added Tax (VAT) from sales to the government will be treated as creditable tax.
Acting Revenue District Officer Richard R. Oquendo of the BIR RD No. 78 in Binalbagan, said in a press release that Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN), states that income payments made by a government office, including barangays, on their purchases of goods and purchases of services from local/resident suppliers except any single purchase amounting P10,000 and below are also subject to creditable withholding tax on income of one percent for supplier of goods and two percent for supplier of services.
Oquendo also said that the government required to withhold creditable VAT must use BIR Form 1600-VT or the Monthly Remittance Return of Value Added Tax Withheld, and BIR Form 1600-PT or the Monthly Remittance Return of Other Percentage Taxes Withheld Form for Non-VAT taxpayers in filing and remitting the amount of taxes withheld.
They must use BIR Form 0619-E or the Monthly Remittance Form for Creditable Income Taxes Withheld (Expanded) for the first and second month of every quarter and BIR Form 1601-EQ or the Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded) for quarterly filing of returns, he said.
Failure to comply with such obligations will be considered as tax fraud and/or tax evasion punishable under Section 57 – Withholding of Tax at Source, Section 58 – Return and Payment of Taxes Withheld at Source, Section 254 – Attempt to Evade or Defeat Tax;
Section 255 – Failure to File Return, Supply Correct and Accurate Information, Pay Tax, Withhold and Remit Tax, Section 256 – Penal Liability of Corporation, and Section 257 -. Penal Liability for Making False Entries, Records or Reports, or Using Falsified or Fake Accountable Forms of the NIRC, as amended, the press release added.
Oquendo also reminded taxpayers that the deadline is on or before April 15, for the filing of the Annual Income Tax Return (ITR) for the taxable year ending Dec. 31, 2023.*