Misamis Oriental

COA warns Misamis Oriental capitol over delayed remittance of P48M in taxes

Uriel Quilinguing

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COA warns Misamis Oriental capitol over delayed remittance of P48M in taxes

COA. The Commission on Audit in Commonwealth Avenue, Quezon City, on October 2, 2018.


Auditors say the delays in remittances are non-compliance with a rule which prescribes that taxes withheld are to be remitted the following month

CAGAYAN DE ORO, Philippines – The Commission on Audit (COA) called out the provincial government of Misamis Oriental for its failure to promptly remit some P48.215 million in taxes withheld, including more than P9.369 million in 2021 and 2022, to the Bureau of Internal Revenue (BIR), depriving the national government of much-needed funds.

This was one of the COA findings in its Misamis Oriental Annual Audit Report 2022 which was posted online, a copy of which was sent to Misamis Oriental Governor Peter Unabia.

Taxes amounting to P6.814 million that were withheld in 2021 were remitted to the BIR Revenue District 98 only after a year – sometime in the second and third quarters of 2022 – while another P128.521 million in taxes withheld in 2022 were also remitted late for three months, according to the COA report.

Auditors said the practice is non-compliance with Revenue Memorandum Circular No. 23-2012 which prescribes that taxes withheld are to be remitted to the BIR on or before the 10th day of the following month for manual filers and the 15th day of the following month for those into electronic filing and payment system (EFPS).

The Misamis Oriental capitol, in its response to the auditors’ findings, attributed the delays to their “inadequate monitoring of carry-over balances” which, as of January 2022, reached P48,215,500.87.

The Annual Audit Report 2022, however, did not indicate when the cumulative amount of unremitted taxes withheld started.

Unabia assumed the gubernatorial post in mid-2022, succeeding Misamis Oriental 2nd District Representative Yevgeny Vincente Emano who served as the province’s chief executive for nine years.

The provincial government, with a work force of 3,795 as of December 2022, withheld and remitted taxes on compensation and payments to suppliers/contractors amounting to P194.878 million and P201.045 million, respectively, in 2022.

In the COA report, Table 15 labeled “Due to BIR account balance” as of December 31, 2022, showed that the unremitted amounts were P25.840 million for the general fund, P2.898 million for the special education fund, and P13.310 million for the trust fund.

An inquiry by state auditors on accounting personnel involved showed that their cut-off dates in the remittance of taxes withheld was different from that of COA, and that “all transactions paid after the 20th day of the current month will be taken up in the next month’s remittance and so on.”

Auditors said there was no matching of taxes withheld against the remitted because paid transactions during the current month were recorded in the same month.  

They said setting a cut-off date posed no setback as the next remittance period also included the remaining period of the previous month’s withholding taxes. The dilemma, however, lies in the commitment and effort to remit promptly in which some periods showed otherwise.

Since the local governments receive their share of the national wealth through the National Tax Allotment (NTA), it is proper to also do their part in remitting withheld taxes promptly and exactly, the COA report said. 

RMC No. 23-2012 issued on February 14, 2012, authorizes government withholding agents “to withhold tax on compensation, on income payments subject to expanded withholding tax and final withholding tax on government money payments to VAT-registered and non-VAT-registered taxpayers subject to percentage tax.”

COA-Northern Mindanao recommended that Unabia direct the provincial government’s accountant and treasurer to ensure the prompt and correct remittance of taxes withheld to avoid unnecessary penalties.

It also reminded the provincial government to institute measures to improve its withholding and remittance process to ensure that the unremitted taxes at year-end should only include the taxes withheld during the last month of the year.

The Provincial Accountant’s Office agreed with the COA findings that there is inadequate monitoring of balances for taxes withheld but maintained that any tax withheld after the cut-off date will be remitted on the succeeding taxable month.

The office said the provincial government’s delayed remittance of taxes withheld in 2021 until the second and fourth quarters of 2022 was attributed to reconciliation efforts aimed at addressing previously overlooked and omitted taxes withheld in 2021. – Rappler.com

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