RMC No. 47-2023v2

RMC No. 47-2023 (May 3, 2023) reiterates when National Government Agencies, LGUs, GOCCs and other government entities must remit withheld taxes. Citing Section 2.57.4 of Revenue Regulations No. 2-98, it states that the duty to deduct and withhold arises when the income payment is paid or payable, or when it is accrued or recorded as an expense or asset in the payor's books — whichever comes first; if income is not yet paid or payable but is already recorded as an expense or asset, the obligation to withhold arises in the last month of the return period in which it is claimed as an expense or amortized. Since the Commission on Audit has prescribed accrual accounting for NGAs and LGUs since 2002 under Philippine Public Sector Accounting Standards, concerned entities should not ground withholding on the old cash basis, and must strictly comply to avoid penalties.