Unrecorded creditable withholding taxes on rental income
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceWhen tenants paid rent, they withheld part of the payment as tax and gave NHA a certificate. NHA didn't record these withheld taxes, so its accounts showed more money owed to it than actually was, and it didn't claim the tax credits it was entitled to.
Why It Matters
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Original Audit Finding Excerpt
"Further review of the income account as at December 31, 2023, disclosed that rental payments to NHA starting from July to December 2023 have been reduced by withheld taxes, as shown in the attached BIR Form No. 2307 or Certificate of Creditable Tax Withheld at Source (CWT). However, these CWTs were not recognized or recorded by the NHA in their books of accounts."