Withholding Taxes Quiz

Withholding tax is a tax liability collected in advance from any individual or business who earns an income.

A withholding agent is any person or entity who is in control of the payment subject to withholding tax and therefore is required to deduct and remit taxes withheld to the government.

The importance of withholding tax system includes encouraging voluntary compliance, reducing cost of collection effort, preventing delinquencies and revenue loss, and preventing dry spell in the fiscal conditions of the government by providing revenues throughout the taxable year.

<p>The features of withholding tax system include automatic constitution of resident payor of income as withholding agents, a system of advance collection of payee’s income tax liability, the amount withheld being a trust fund for the government, and the amount withheld being creditable or final in.</p> Signup and view all the answers

<p>The purpose of withholding tax is to collect tax liabilities in advance from individuals or businesses earning income, and to ensure the government receives revenues throughout the taxable year.</p> Signup and view all the answers