Local govt units to remit taxes immediately to BIR

Local treasurers and assessors said they will immediately remit the taxes withheld by local government units (LGUs) from employees and businessmen to the Bureau of Internal Revenue (BIR) to help the tax agency meet its revenue requirements. Philippine Association of Local Treasurers and Assessors President Victor Endriga, who is also the treasurer of the Quezon City government, said taxes are needed for the delivery of basic and essential goods as well as services to upgrade the quality of life of the citizens. "The remittance of withholding tax by LGUs had been a constant strain in the relationship between the two agencies. LGUs, as a matter of practice, held on to the said taxes for a length of time before remittance," he said. To correct the delayed remittance, Endriga said the government could deduct the unpaid obligations of LGUs from their internal revenue allotment (IRA). "For the BIR to collect withholding taxes without undue delay, the national tax agency merely deducts from the LGUs' share of IRA any amount due it. This way, we serve justice to both local and national governments," he said. BIR Commissioner Jose Mario Bunag hailed the move to remit withholding taxes collected from employees and businessmen as soon as possible. The BIR chief cited the quick response of Metro Manila-based LGUs to the ardent call to turn-over the collected tax to the BIR for its proper disposal. The Department of Finance (DOF) vowed to run after delinquent LGUs that have failed to comply with the withholding tax laws and to remit the taxes withheld on time. LGUs in Revenue Region 5 (Valenzuela City) owe the Bureau of Internal Revenue (BIR) as much as P201.31 million in withholding taxes withheld as early as 1992 but has yet to be remitted to the national coffers. The biggest delinquent LGUs in the revenue region were Caloocan City that failed to remit P93.91 million worth of taxes withheld since 1992 until 1998. The amount has doubled to P184.95 million due to interest, surcharge, and compromise penalty. The second biggest delinquent LGU was Plaridel, Bulacan with P9.7 million followed by Valenzuela City with P4.79 million, and Malabon with P1.86 million. Delinquent accounts would benefit LGUs since 40 percent of every P1 amount collected would go back to local governments for infrastructure projects and social services. It would be recalled that the DOF during the time of former Finance Secretary Alberto Romulo entered into a memorandum of agreement with the Department of Interior and Local Government (DILG) and LGUs to unite their efforts to enhance tax enforcement and revenue collections. Under the agreement, the DILG vowed to help the BIR in facilitating LGUs' compliance with the withholding tax laws and regulations, as well as in the remittance of the withheld taxes on time. - GMANews.TV