January 6, 1995

BIR RULING NO. 002-95

74,251 000-00 002-95
YOUNGS MEN'S CHRISTIAN
ASSOCIATION (YMCA)
350 Arroceros Street
Ermita, Manila
Attention : Mr. Liberato G. Siaron
Secretary for Finance & Property
Gentlemen:
This refers to your letter dated May 8, 1992 stating that due to the demolition
of the YMCA of the Philippines buildings and facilities, your main source of income
and from which you derived your salaries has been totally lost; and that the proposed
new building is still under negotiation with your present developer which up to now is
still uncertain.
cdphil

Based on the foregoing, you now request that you be exempted from the
payment of penalty on the remittance of your monthly withholding tax and the
expanded withholding tax because your resource has been depleted.
In reply, please be informed that Section 74 of the Tax Code is explicit that the
taxes deducted and withheld by the employer/withholding agent on wages of the
employees shall only be held as special fund in trust for the Government until the
same are paid to the collecting officers. Such being the case, pursuant to Sections 251
and 254 in relation to Section 73(a), all of the Tax code, reading:
"Section 73. Liability for Tax.
"(a) Employer. The employer shall be liable for the withholding and
remittance of the correct amount of tax required to be deducted and withheld
under this Chapter. If the employer fails to withheld and remit the correct
amount of tax as required to be withheld under the provision of this Chapter,
Copyright 1994-2006

CD Technologies Asia, Inc.

Taxation 2005

such tax shall be collected from the employer together with the penalties or
additions to the tax otherwise applicable in respect to such failure to withhold
and remit.
"(b) . . .
"Section 251.
Failure of a Withholding Agent to Collect and
Remit Tax. Any person required to collect, account for, and remit any tax
imposed by this Code who willfully fails to collect such tax, or account for and
remit such tax, or willfully assists in any manner to evade any such tax or the
payment thereof, shall, in addition to other penalties provided for under this
Chapter, be liable to a penalty equal to the total amount of the tax not collected,
or not accounted for and remitted.
"SECTION 254.
Failure to File Return, Supply Correct and
Accurate Information, Pay Tax, Withhold and Remit Tax and Refund Excess
Taxes Withheld on Compensation. Any person required under this Code or
by regulations promulgated thereunder to pay any tax, make a return, keep any
records, or supply correct and accurate information, who willfully fails to pay
such tax, make such return, keep such record, or supply such correct and
accurate information, or withhold or remit taxes withheld, or refund excess
taxes withheld on compensation, at the time or times required by law or
regulations shall, in addition to other penalties provided by law, upon
conviction thereof, be fined not less than Ten thousand pesos (P10,000) and
imprisonment of not less than one (1) year but not more than ten (10) years.
xxx

xxx

xxx"

for failure to collect, or account for and remit taxes withheld, the imposition of the
penalties prescribed therein is mandatory, as shown from their language and context,
and therefore, cannot be waived.
cdpr

Very truly yours,

LIWAYWAY VINZONS-CHATO
Commissioner of Internal Revenue

Copyright 1994-2006

CD Technologies Asia, Inc.

Taxation 2005