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THE
Bureau of Internal Revenue (BIR) Wednesday underscored
the important role of withholding agents in the economic
development of the country as the government’s partners
in tax collection.
The
withholding agents, however, have the responsibility to
their stakeholders such as their employees and service
providers, as well as banking institution and other
financial intermediaries during the period of income-tax
filing.
As a
withholding agent, the employer has the obligation to
issue withholding certificates to his employees, and
under the present filing system, withholding
certificates issued to purely compensation
income-earning employees are reflected in BIR Form 2316
for filing or nonfiling by the employee. Hence, in case
Form 2316 carries no payment as tax withheld equals tax
due and the employee has only one employer in the
Philippines, the employee need not go to BIR offices or
to the banks to file this Form; that employee is exempt
from filing under the so-called “Substituted Filing
System.”
As the
BIR is still deluged with BIR Forms 2316 with zero or
breakeven payment, the bureau reiterated its early
statement that individual tax filers covered by the
system need not file their income tax returns as BIR
Form 2316 (Certificate of Compensation Payment/Tax
Withheld For Compensation Payment With or Without Tax
Withheld) serves the same purpose/s as BIR Form 1700 in
all government transactions.
For
contracting parties or payors, these are obliged to
withhold compensation, final and expanded. Hence,
companies that are payors to servicing sectors like
professional services (doctors, CPAs, engineers),
janitorial and security companies, among others, must
issue the corresponding creditable withholding tax
certificates using BIR Forms 2304 (Certificate of Income
Payment Not Subject to Withholding Tax (Excluding
Compensation Income), 2306 (Certificate of Final Income
Tax Withhed at Source), 2307 (Certificate of Creditable
Tax Withheld at Source), and 2316 which must be attached
for purposes of filing the annual income tax returns.
Banks
and other financial intermediaries serving as
withholding agents are required to furnish their
depositors BIR Form 2306 reflecting final withholding
taxes on interest and dividend payments.
These
withholding tax certificates are required attachments to
2007 income tax returns of income recipients to help
them compute their correct taxes to be paid not later
than April 15,2008. |
