Preamble
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: