LAST Tuesday, June 30 the Bureau of Internal Revenue (BIR), Revenue District No. 8 in the City of Baguio continued its briefing for the barangays in the city regarding the matter on withholding tax on government money payments.

The seminar cum briefing pointed out the vital role that the barangay officials play in the collection of taxes by the National Government.

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The briefing was led by no less than the new BIR Revenue District Officer (RDO) for District 8 officer-in-charge (OIC) Rustico M. Bayani who in his welcome note encouraged the barangays to comply on time with the remittances that are due since his office has observed low compliance with the above matter.

In welcoming the participant barangay officials (barangay chairman, treasurer, or representative), Mr. Bayani also thanked Liga-Baguio Chapter President & City Councilor Joel A. Alangsab for being instrumental in inviting barangay officials to attend the said briefing.

Apart from the barangay officials who were invited to attend, also present were some representatives from various national and local agencies keen on learning more about withholding taxes.

What exactly are withholding taxes? A simple definition as provided through the investor glossary on the Internet says a withholding is a tax automatically taken from income received during the year. Who takes them? Well of course the government.

Now during the briefing conducted by the BIR, they presented four types of withholding taxes, namely withholding tax on compensation, expanded withholding tax (EWT), final withholding tax, and withholding tax on government money payments.

The latter type of withholding tax was further categorized into withholding tax on value-added tax (VAT) and withholding tax on percentage and franchise tax.

Of particular interest during the briefing was the expanded withholding tax and withholding tax on government money payments since this directly involves the participation of the barangay and its barangay officials. It was explained that expanded withholding tax refers to a kind of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter year.

On the other hand, withholding tax on government money payments refers to a tax withheld by government bureaus, offices, and instrumentalities, including government-owned or controlled corporations and local government units, partnerships, and/or associations.

The various BIR forms used were also explained such as BIR Form 1600 utilized for monthly remittances of VAT and other percentage tax, BIR Form 1601C which is the Monthly Remittance Return of Income Tax Withheld on compensation, BIR Form 1601E dealing with Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded), BIR Form 604CE which is used for the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes, and BIR Form 1604E which is the Annual Information Return of Creditable Income Taxes Withheld (Expanded).

Likewise, pertinent laws regarding compliance with requirements and remittances were presented such as Executive Order No. 651 of February 16, 1981 issued by former President Ferdinand E. Marcos which requires government offices, agencies, and instrumentalities to comply strictly with the laws and regulations on withholding of taxes, as well as Revenue Memorandum Order No. 8-2003 issued on March 3, 2003 personally charging government officials which includes barangay officials (barangay chairman and barangay treasurer) with the duty to correctly withhold taxes on compensation, expanded and final withholding tax, as well as government money payments to persons registered as Non-VAT (percentage, franchise, etc.) and VAT taxpayers and the timely remittance of taxes withheld.

The barangay chairman and the barangay treasurer are, therefore, deemed as withholding agents for the purposes mentioned above.

Finally, the BIR reminded, among others, that the participants have to withhold the correct amount of taxes, file, and remit on time to avoid penalties and file only one return for all transactions made during the month.

This might be too technical and convoluting for some laymen, but for our barangay officials, this is simply a way of re-orienting themselves with their priorities and responsibilities in connection with barangay governance. That's why its not so easy and simple being a barangay official because this entails a lot of responsibility, not to mention the multifarious duties attached to being a barangay official.

Having said that, I hope with this kind of briefing more knowledge will be gained by our barangay officials in their commitment to dispense public service to their constituents. Let us also remember that taxes are the lifeblood of the government.

The Liga ng mga Barangay-Baguio Chapter finally has its own pigeonholes where notices and communications to the barangays can be placed and retrieved. Located at the Liga office, these pigeonholes will serve as temporary repositories of documents issued by various agencies or offices for the barangays, which may include notices, information, announcements, receipts, etc.

The reason for this project is to assist our Liga member barangays and facilitate in the dissemination of vital information needed by the barangays. This is also in line with the avowed commitment of our Liga President Joel A. Alangsab for the Liga office to serve as a conduit by which barangays are timely informed on vital matters affecting the latter.

Liga President Alangsab also explained that this pigeonhole project is in response to the clamor and need of the barangays to be effectively informed of matters that affect them and to allow them the opportunity to respond quickly and efficiently.

Finally, the next schedule for the off-site registration of the Commission on Elections (Comelec) will be on July 3 to 4, 2009 from 8 a.m. to 5 p.m. at District 8 comprising barangays Camdas Subdivision, Dizon Subdivision, East Quirino Hill, Happy Homes-Old Lucban, Lower Quirino Hill, Middle Quirino Hill, Pinget, and West Quirino Hill.

For additional information, kindly coordinate with or visit the barangay hall of district coordinator and barangay chairman Peter Wasing.