The Commission on Audit (CoA) has criticized the provincial government of Bohol for not remitting P5.27 million in taxes withheld from 2021 to 2022 on time.
According to its 2022 report, CoA found that the provincial government, under the leadership of Gov. Aris Aumentado, failed to fully remit the taxes withheld within the prescribed periods, resulting in an accumulated unremitted balance of P5,263,204.95 from December 2021 to November 2022.
CoA said that this violated the tax laws and the BIR Revenue Memorandum Circular No. 23-2012, which requires government officials to withhold and remit the correct amount of tax.
The circular also warns that non-compliance may lead to interest and surcharge penalties.
CoA observed that the provincial government did not remit the taxes withheld in a given month in the following month as required. Instead, the remittances made were either lower or higher than the previous month’s withheld taxes, partially offsetting the months with lower remittance.
CoA blamed the lapses on the flawed design of processes and procedures for withholding and remitting taxes.
The provincial accounting office and the treasurer’s office share the responsibility for this task.
CoA said that this setup prevented the provincial government from ensuring that all the withheld taxes for a specific month were included in the remittance for the next month. This also exposed the provincial government to the risk of fines and penalties for not complying with its obligations as a withholding agent.
CoA urged the provincial government of Bohol to compute and file an amended tax return for the accumulated unremitted taxes from December 2021 to November 2022.
The provincial government, on the other hand, told CoA that it prepares an alpha list of all employees annually, showing their taxable income and taxes withheld and remitted.
Bohol Capitol, in an audit reply, also said that it ensures that the taxes remitted match the taxes due of each employee.
However, CoA said that the provincial government should also monitor and evaluate its obligations as a withholding agent at the end of each month, not just at the end of the year.
CoA said that this would help prevent and correct errors more easily and quickly, rather than waiting for the year-end, when errors are more likely to accumulate and become harder to fix.