Revenue Memorandum Circulars(RMC) issued by the Bureau of Internal Revenue(BIR) and other

agencies/offices publishes pertinent and applicable portions as well as amplifications, of laws,

rules, regulations and precedents. Republic Act (RA) 10963, otherwise known as the Tax Reform
for Acceleration and Inclusion (TRAIN) stayed on track and finally reached its destination in time
to take effect last January 1, 2018. Amendments in the Tax Code which are related to tax
compliance are the changes in the top rate for expanded withholding tax (EWT) and the filing of
deadline for final withholding tax (FWT) and expanded withholding tax (EWT) returns. The
Revenue Memorandum Circular (RMC) No. 1-2018 dated 4 January 2018 is issued to supplement
RMC No. 105-2017 dated 28 December 2017 by providing the steps on how to use the revised
Withholding Tax Table on Compensation; and by advising on the change in the Creditable
Withholding Tax Rate on Income Payments to Self-employed Individuals or Professionals. The
Bureau of Internal Revenue (BIR),by virtue of Revenue Memorandum Circular (RMC) No. 01-
2018, has advised the reduction of EWT rates from ten percent(10%) and/or fifteen percent(15%)
to eight percent(8%) for the following income tax payment: a.) Professional fees, talent fees,
commissions, etc. for services rendered by individuals, b.) Income distribution to beneficiaries of
estates and trusts, c.) Income payment to certain brokers and agents, d.) Income payments to
partners of general professional partnerships, e.) Professional fees paid to medical practitioners
and f.) Commission of independent and/or exclusive sales representatives, and marketing agents
of companies. The TRAIN Law provides that starting January 1, 2019, the EWT rates will range
from one percent(1%) to fifteen percent(15%). Previous top rate was at thirty-two percent (32%).
Some risks foreseen in the reliance on RMC may result in the assessment of deficiency in EWT,
surcharge, interests and penalties. In the case where the reduction of EWT rate through RMC is
not proper, and a taxpayer would be subjected to a deficiency tax assessment, basis to argue
cancellation of interest/penalties may appear in the deficiency tax assessment. This is because the
mistake of the taxpayer in payment of his tax is due to an erroneous written official advice of a
revenue officer which in this case is the RMC no. 01-2018.