Question & AnswerQ&A (Republic Act No. 7649)
Republic Act No. 7649 requires the government and its political subdivisions, instrumentalities, agencies, including government-owned or controlled corporations (GOCCs), to deduct and withhold value-added tax (VAT) at the rate of 3% on gross payments for the purchase of goods and 6% on gross receipts for services rendered by contractors.
The withholding requirement applies to the Government, its political subdivisions, instrumentalities, agencies, and government-owned or controlled corporations (GOCCs).
The Government is required to withhold VAT at 3% on the gross payment for the purchase of goods and 6% on the gross receipts for services rendered by contractors.
Withholding must be done on the purchase of goods from sellers and services rendered by contractors, provided these transactions are subject to VAT under Sections 100 and 102 of the National Internal Revenue Code.
The VAT withheld by the government agencies on purchases or services shall be creditable against the VAT liability of the seller or contractor.
The value-added tax withheld must be remitted within ten (10) days following the end of the month in which the withholding was made.
RA 7649 amends Section 110 of the National Internal Revenue Code by adding a new paragraph (c) concerning the withholding of creditable value-added tax.
The Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue, is tasked to promulgate the necessary rules and regulations to effectively implement this Act.
RA 7649 took effect fifteen (15) days after its complete publication in the Official Gazette or in at least two national newspapers of general circulation, whichever came earlier.
Yes, RA 7649 repeals or amends all laws, decrees, orders, rules, regulations, and other issuances inconsistent with its provisions.