Presidential Decree No. 1351 (PD 1351) — Amending Sections 30 and 53 of the National Internal Revenue Code of 1977 to Authorize the Secretary of Finance to Require Withholding of Creditable Income Taxes from Certain Income Payments and to Require Proof of Such Withholding as an Additional Condition for Deductions from Gross Income
WHEREAS, the most convenient, effective and generally
accepted method of collecting income taxes is through the withholding
system;
WHEREAS, in order to optimize the effectiveness of the
present tax collection system, it is necessary to expand the coverage of the
withholding system;
WHEREAS, certain ordinary and necessary expenses and other
items allowed as deductions constitute income to the recipients thereof and
therefor includible in their gross income;
WHEREAS, in order to insure the collection of the income tax
on these income payments, it is necessary to subject such payments to the
withholding of tax at source and to require proof of such withholding and
payment to the BIR as a requirement for the deductibility of such payment;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of powers vested in me by the
Constitution, do hereby order and decree the following:
SECTION 1. Section 53(f) of the National Internal Revenue
Code of 1977 is hereby amended to read as follows:
"(f) The Secretary of Finance may, upon recommendation of the Commissioner of
Internal Revenue, require also the withholding of a tax on the same items of
income payable to persons (natural or juridical) residing in the Philippines by
the same persons mentioned in paragraph (b) (1) of this Section at the rate of
not less than 2-1/2% but not more than 35% thereof which shall be credited
against the income tax liability of the taxpayer for the taxable
year."
SECTION 2. Section 30 of the National Internal Revenue Code
of 1977 is hereby amended by adding a new paragraph to read as follows:
"(m) Additional requirement for deductibility of income payments.
Any income payment which is otherwise deductible from gross income under this
Section shall be allowed as a deduction only if it is shown that the tax
required to be deducted and withheld therefrom has been paid to the Bureau of
Internal Revenue in accordance with this Section, Section 54 and 93 of this
Code."
SECTION 3. This decree shall take effect immediately.
DONE in the City of Manila, this 17th day of April, in the year of Our Lord,
nineteen hundred and seventy-eight.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President:
(Sgd.) JACOBO C. CLAVE
Presidential Executive
Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
