Tax Deficiencies

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Ref.No. MDGT-2008-08

03 April 2008

To : Deans, Directors, heads of Units and all concerned

Subject : Tax Deficiencies


Pursuant to BIR Revenue Regulation No. 2-98 dated 17 April 1998 on "Zero Tax", The Accounting Office witholds income tax such that the amount of income tax withheld at the end of the year is the correct amount of tax corresponding to the employees' taxable income.

While the Accounting Office has been implementing the above-mentioned Revenue Regulation, there are unexpected variables that affect the tax liability of employees during the year. These variables, incluidng incomes from honoraria, overtime/ overload pay, incentive allowance, salary increases, etc, may only be known towards the end of the year. Furthermore, payrolls are made one month in advance. There are also some delays in the submission of dependents or status of employees that affect the tax brackets and the tax liability of an employee (BIR form 2305). hence, during summarization of income after yearend, there are employees who have tax deficiencies as reflected in the Statement (Tentative Computation of Income for Taxable Year 2007) issued by the Accounting office.

Settlement of tax deficiency no longer necessitates filing pursuant to the Substituted Filing of Income Tax Return under BIR Revenue Regulation No. 19-2002. Employees therefore are advised to settle any tax deficiency not later than 15 April 2008.

Rest assured that appropriate measures shall be made to avoid or minimize similar incidents in the future.

For your information and guidance.

Mary Delia G. Tomacruz
Vice Chancellor for Administration