Deficient withholding tax on consultant payments in Benguet 1st DEO
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceA district engineering office under-withheld taxes on consultant payments by using a lower taxable base. This caused consultants to be overpaid and the government to lose tax revenue.
Why It Matters
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Original Audit Finding Excerpt
"Moreover, in DPWH CAR, Benguet 1 st DEO was deficient in the withholding of taxes by P228,638.45, leading to overpayments to consultants. This was due to inappropriately lower tax base used in the computation of 5 percent creditable VAT and 2 percent expanded tax contrary to Section II of Revenue Memorandum Order No. 23-2014, which requires withholding taxes on government payments based on gross payments."