The Pinoy Business Chronicle

Business news and analysis. Covering financial news, economic issues, stock market data, local business, business policy and more.

Philippines Economy News

BIR sets lower, P5M threshold for withholding agents in some RDOs

bir sets lower p5m threshold for withholding agents in some rdos - BIR sets lower, P5M threshold for withholding agents in some RDOs

THE Bureau of Internal Revenue (BIR) said Friday that its withholding rates for major suppliers of goods and services are at 1% and 2% respectively, but the qualifying threshold for serving as an agent has been lowered in some districts to P5 million worth of gross sales or receipts of gross purchases.

The rates are outlined in Revenue Regulations No. 31-2020, and apply to all suppliers meeting the minimum thresholds for serving as withholding agents in force at the various Revenue District Offices (RDOs).

The eligibility cutoff is at least P12 million worth of gross sales or receipts of gross purchases for RDOs under Groups A and B. The new P5 million cutoff applies to RDOs in Groups C, D, and E.

The old rule was for a blanket threshold of P12 million regardless of RDO classification.

“This is a revenue enhancement measure as this will allow the BIR to increase its collection of withholding tax from tax withholding agents under groups C, D, and E as the threshold amount is lowered to P5 million,” said Maria Lourdes P. Lim, the tax managing partner of Isla Lipana & Co., PwC Philippines, in a text message on Monday.

However, Ms. Lim said that the new scheme could be “confusing” for taxpayers and they still need to verify whether they belong to the top withholding agents based on the published list. — Luz Wendy T. Noble

Leave a Reply

Theme by Anders Norén