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Error found in SDT bond tax computation

Tuesday, February 29, 2000 - The national government stands to lose some P107 million due to the error in computing the amount of withholding tax on the coupon rate of the small-denominated treasury bonds (SDTbonds) floated last year worth P18 billion.

Government documents obtained by reporters yesterday showed that error was made by the Bureau of Treasury (BTr) in the calculation of the 20 percent final withholding tax on SDTbonds.

Instead of using the total yield of 14.75 percent, it was learned that BTr used 13.625 percent on the coupon rate of the bonds.

Official documents stated that BTr has yet to rectify its error causing the yield to be higher by P28 for every five year treasury bond issued.

As a result, the national government would be losing P28 per bond.

It should have collected P4,838.14 for every P5,000 face value instead of the P4,810.30 the BTr is collecting at the moment.

This brings the foregone revenue to P107 million.

However, the government documents also hinted that the more realistic losses could hit between P53 million to P86 million.

This is on the assumption that half of the bonds were purchased by tax-exempt government institutions such as the Government Service Insurance System and the Social Security System.

Asked to react, Deputy Treasurer Eduardo Mendiola brushed aside the error, stressing that the computation based on the standard form currently being adopted/used the market.

The BIR ruling could have corrected the treasury's error but the ruling was recalled by the new BIR management and had declared it to be null and void.

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-- Dee (T1Colt556@aol.com), February 28, 2000

Answers

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-- Dee (T1Colt556@aol.com), February 28, 2000.

Dee -- loves yer posts to death, but could stand to do without the acronymic prefaces .......

-- Squirrel Hunter (nuts@upina.cellrelaytower), February 29, 2000.

Okay =)

-- Dee (T1Colt556@aol.com), February 29, 2000.

I wish people would stop saying, "Dee I love your posts but...."

here's an unequivocal "Dee I love your posts."

-- Sir Richard (richard.dale@unum.co.uk), February 29, 2000.

Thank you Sir Richard. =)

-- Dee (T1Colt556@aol.com), February 29, 2000.