THE PHILIPPINE Health Insurance Corp. (PhilHealth) must withhold taxes
from remittances to accredited hospitals and medical practitioners, the
Bureau of Internal Revenue (BIR) stated.
While the state-run firm is exempted from income taxes, it is not
exempted from its responsibility as a withholding agent of the BIR,
Revenue Memorandum Circular No. 38-2011, dated Sept. 1, stated.
"Among the income payments being subjected to expanded withholding tax
(EWT) are its payments to hospitals and medical practitioners who
rendered medical services to [PhilHealth] members," it explained.
PhilHealth is required to levy a 10% EWT on medical practitioners with
annual gross incomes of P720,000 and below. A higher tax rate of 15% is
charged if the gross income exceeds P720,000 in a year.
Meanwhile, payments to hospitals for the medical services provided for
PhilHealth members are subject to an EWT rate of 2%.
"However, some field or regional offices of [PhilHealth] do not withhold
the prescribed tax on payments… since it is their opinion that such
payments are just reimbursements of the members' benefits and not
payments for services rendered to [PhilHealth]," the issuance read.
The BIR clarified that professional and talent fees paid for the
services rendered by professionals, including medical practitioners, are
subject to tax, "to be withheld by the person having control over the
payment," which in this case is PhilHealth.
Since PhilHealth has a table of benefits per member depending on the
medical case, it can determine the amount of payments to be made to
hospitals and medical practitioners. This will dictate the amount of
taxes to be withheld, the BIR stated.
The BIR, which accounts for some 70% of state revenues, is tasked to
collect P940 billion this year.
The BIR has brought in P531.785 billion as of July, an improvement of
more than a tenth from the P467.282 billion netted in the first seven
months of 2010. However, it still fell short of the P534.9-billion
target. -- D. C. C. Jiao
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