Section 9Sec./Art. 9

Section 110(c) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"(c)Withholding of Creditable Value-Added Tax.

The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making payment on account of its purchase of goods from sellers and services rendered by contractors which are subject to the value-added tax imposed in Sections 100 and 102 of this Code, deduct and withhold the value-added tax due at the rate of three percent (3%) of the gross payment for the purchase of goods and six percent (6%) on gross receipts for services rendered by contractors on every sale or installment payment which shall be creditable against the value-added tax liability of the seller or contractor:Provided, however,That the payment for lease or use of properties or property rights to nonresident owners shall be subject to ten percent (10%) withholding tax at the time of payment.

For this purpose, the payor or person in control of the payment shall be considered as the withholding agent."