Non payment of withholding taxes...

Good afternoon po,

Our office stopped deducting withholding taxes from us and told us to wait until they finalize some permits. They have stopped deducting taxes from us for more than 5 months already, we receive the same salary rate and the office pays our SSS,Pag Ibig and PhilHealth; except our withholding taxes. I need a 2011 ITR for proof of payment, they said I have to pay an accountant to do it for me. Isn't it the office should be held responsible for such duty?... and also be held responsible for the penalties in case of tax evasion charges? Is this not tax evasion already? Isn't it the management should be the one to deduct and pay our withholding taxes and issue an ITR at the end of the year? Salamat po.

Respectfully yours,
Bon Ruiz ,Tagaytay City

bonruiz wrote:Good afternoon po,

Our office stopped deducting withholding taxes from us and told us to wait until they finalize some permits. They have stopped deducting taxes from us for more than 5 months already, we receive the same salary rate and the office pays our SSS,Pag Ibig and PhilHealth; except our withholding taxes. I need a 2011 ITR for proof of payment, they said I have to pay an accountant to do it for me. Isn't it the office should be held responsible for such duty?... and also be held responsible for the penalties in case of tax evasion charges? Is this not tax evasion already? Isn't it the management should be the one to deduct and pay our withholding taxes and issue an ITR at the end of the year? Salamat po.

Respectfully yours,
Bon Ruiz ,Tagaytay City

Yes, your employer is the one responsible in deducting & remitting your taxes & mandatory contributions from your COMPENSATION solely from that company; however, your employer failed to to so, with regards to the taxes.

But if you have other sources of income, aside from employment, you're the one responsible to file your ITR with respect to that income, excluding your compensation if your employer is withholding your respective income tax.

Our office stopped deducting withholding taxes from us and told us to wait until they finalize some permits.

What permit it is? If it is a business permit or other permits in order for a business to legally operate, I'm assuming that your employer is not yet permitted to legally operate its business. This is only a presumption.

So I would like to suggest:
Kindly write a letter with regards to your situation/issue and address it to your employer. Also, quoting this provision from the Civil Code of the Philippines: Obligations & Contracts.

Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone .

This provision means, with respect to your issue is, " if your employer is inactive in helping you with your concern you may ask for the service of an accountant, to fix your problem at the expense of your employer, i.e. your employer is the one who will pay the professional fee of the accountant, as well as the penalties, EXCEPT your TAXES since you received your pay GROSS of tax .”

I hope this helps.

P.S. This is only my opinion for Tax is not the area of my expertise/work right now, but one of my interest to explore since I’m a newly-graduate & CPA.