BUWIS SERYE #2: SINGLE PARENT MARILEN

Marilen Reyes, 30 years old, is a single mother to her 10-year old daughter, Sheila.  She got married right after college to her high school sweetheart, Ben, but after 5 years of marriage, she discovered that Ben was having an affair with another woman.  Though she tried to work it out with him, Ben decided to leave her and her daughter.   At the start, he was sending some money regularly for Sheila’s schooling but, lately, his financial support has stopped.

It is a good thing that Marilen has been a working mother from the start of their marriage. She was able to save some money when they were still a double-income family but, ever since she became a single parent, finances became tight, especially during enrollment time. It is then a blessing for her to belong to a company which provides for interest-free education loan for dependents. However, she is quite anxious about the future when Sheila goes to college.  

Marilen currently works for one of the top Business Process Outsourcing (BPO) firms in the country as a business performance analyst.  She has a monthly salary of P50,000 and with this, she earns an annual income of P700,000, broken down as follows:

Annual salary       P600,000

Bonuses                 100,000

Total                     P700,000

She has heard about the tax reform issue from a young team mate of hers, Kiko.  He has a college buddy, JAL, who shared with him a template for computing the amount of over-collected taxes from his annual salary.  Kiko then shared the template with the rest of his team mates, including Marilen. 

Using the template from Kiko, this is what she came up with:

She noted that, under the current tax system, her Effective Tax Rate (ETR) is 26%.  This means that a little more than ¼ of her pay goes to taxes!  

Based also on the template, had the tax brackets been adjusted from their 1997 level, her ETR should just be 20% -- which means a huge tax savings of 6%, equivalent to P30,410 per year.  How she wished that the amount of over-collected taxes could have gone instead to a college fund for Sheila!

That is why when Kiko shared with their team the #BlackPaydayFriday protest last October 30, she did not hesitate to wear black that day in work and joined her team mates for a groufie while holding #TaxReformNow signs. By joining that protest, her one big hope is that she will be able to put aside more of her take-home pay for Sheila’s future, rather than simply overpaying for taxes to a Government which never really gave much support to single parents, like her.  

May magagawa kayang pagbabago sa tax system ang Gobyerno para sa mga single parent katulad ni Marilen?

Abangan!  

BUWIS SERYE #1: SINGLE YOUNG PROFESSIONAL JAL

Jose Anton Luna, or JAL to friends, is a 23-year old employee in a telco company.  After finishing a management course in college 2 years ago, he started working with the company as a Financial Analyst.  He is single and lives with his parents in Bulacan, where he commutes daily to and from work. 

He loves going out with friends from time to time but, is also a prudent in spending his hard-earned money.  He wants to save and invest some of it in mutual funds but, is finding it hard.  His net take-home pay is barely enough for his daily food and transportation costs. He also gives part of it to his mom to contribute to expenses at home.

His current fixed monthly basic salary is P17,500 and with this, he earns an annual income of P295,000, broken down as follows:

Annual salary     P210,000

Bonuses                 35,000

Overtime pay          50,000

Total                   P295,000

He has read about the proposed tax reforms in Congress and wondered to himself –

“How will the proposed updating of tax brackets to inflation impact his net take home pay?”

So, he decided to use his financial analytical skills to find out.  This is what he came up with:

He calculated his tax and noted that he is taxed at the 4^th bracket level with an effective tax rate (ETR) of 19%.  That is quite high for a young working professional like him! He knows that, in Singapore, the highest tax rate is just 17%.

Since the tax brackets are not adjusted to inflation, he worked back his pay to 1997 level and was shocked to find out that he should have been taxed only at the 3^rd bracket level with an ETR of 14%!  Applying the same level with adjusted bracket values to his current pay, he calculated that he is overtaxed by 5% or by P10,050 annually!

Wow! He could have already invested that amount in mutual funds!  Since he has been working for 2 years now, that would have been easily P20,100 in savings plus interest.  

With this, he realized the importance of the tax reform issue and decided to support the #TaxReformNow cause.  Last October 30, 2015, he joined the #BlackPaydayFriday protest by wearing black at work and posting a picture of himself in his Instagram account. He really would like to see Congress, coming back from its recess, to #PassTaxReformNow.  

Now he eagerly waits for Congress leaders to talk with the President on Monday, October 9, to finally convince him to change his mind in supporting tax reform, even just the proposed updating of tax brackets to inflation. He does not see any reason why such a measure should not be passed. It is but right to correct what is inherently wrong and unjust in the tax system for the past 19 years. What further study does the DOF need to fully understand that?

And if the Government fails to do something about it in this term, he knows as a duly-registered voter, who even took a day off his work for COMELEC biometrics,  that this will be an important election issue for him come 2016.

Papakinggan na kaya ng Gobyerno ang hinaing ng mga single young professionals gaya ni JAL? 

Abangan! 

WATCH OUT FOR "BUWIS SERYE!"

To realize the impact of unadjusted tax brackets for the last 19 years, Tax for Every Juan will run a "Buwis Serye" starting tomorrow, November 3, 2015, to highlight the amount of taxes "over-collected" from taxpayers through the years.  

The start of "Buwis Serye" will coincide with the opening of Congress, coming from its recess. 

For this series, REAL stories of salaried workers (although with fictitious names for confidentiality purposes) will be featured. The series will share their present work and family circumstances,  the amount taxes they pay under the current system, and the amount of taxes over-collected from them because of the Government's failure adjust the tax brackets with inflation. 

This series aims to show actual victims of "Bracket Creep" and, hopefully, this can help seek justice for them.  Our hope is for the Government come to see people for who they are and not merely as taxpayer statistics in the current tax collection system. 

With this, Tax for Every Juan joins the call for President Aquino and legislators to immediately act on pending tax reform proposals in Congress, particularly the indexation of tax brackets to inflation. 

This tax reform measure clearly does NOT require any further study. It simply requires our Government to give back to taxpayers what it has unduly collected from them by way of higher taxes through inflation for the past 19 years. 

Regardless of the estimated loss of revenues from this proposal, this measure should NOT also bear any cost on the part of Government. This is because taxpayers have borne for the longest time the burden of higher taxes and, consequently, lower take-home pay.

NOW is the time to give back to taxpayers what rightfully belongs to them. Ngayon ang #TamangPanahon para sa Tax Reform.

So, to the President and our Legislators -- Time to #PassTaxReformNow! 

P.S. - If you would like to have your story featured in the "Buwis Serye," 

please send a pm through our Facebook page 

https://www.facebook.com/taxforeveryjuan 

or post a message in this blog post. 

We'll get in touch with you for the details. Thank you.

ARE FILIPINOS REALLY UNJUSTLY OVERTAXED?

The call for #TaxReformNow has two-parts.  

First, it is all about FAIRNESS.  Filipino taxpayers are calling for the immediate indexation of the existing personal income tax brackets based on movements of the Consumer Price Index (CPI) from the time the 1997 Tax Code was enacted . This is to address the "bracket creep" phenomenon, which has practically raised tax collections for the Government simply through inflation, rather than better tax administration.  Add to this the fact that bulk of individual tax collections have always been borne by salaried workers, who are easy prey to this condition.  

Second, it is about COMPETITIVENESS.  Filipino taxpayers are calling for the lowering of tax rates both for personal and corporate income tax to ensure our country's continued growth and not lag behind our ASEAN neighbors. Lower tax rates, together with the simplification of the tax system, will greatly encourage tax compliance and broaden the narrow tax base. 

The second one we can definitely set aside for now for the next Administration to act on. This will require a comprehensive and holistic approach, as the DOF often puts it. However, we definitely cannt allow the present Administration of President Aquino to just turn a blind eye and stubbornly refuse to address the unfairness of the current tax system.  

Passing a new tax law to simply adjust the existing income tax brackets to inflation would not be that difficult.  They just need to update the income tax table with inflation-adjusted tax base values.

This is how an inflation-adjusted tax table would look like.

And to prove the point about the unfairness of the current tax system, let us check the sample computation below.

Given: Juan used to receive P10,000 monthly basic salary in 1997. He received salary increases to adjust for inflation and his monthly pay is now worth P22,000.

Assuming 13th month pay, Juan's annual salary increased by 115% from 1997 to 2015 (from P130,000 to P286,000) because of inflation.

Under the current tax table, Juan's 2015 income is subject to a higher rate of tax because of the unadjusted tax brackets. Everything has already been adjusted to inflation, except for the tax brackets.  Thus, Juan is clearly overtaxed by P5,350 under the current unjust tax system! 

What else do we need to prove more?

The #TaxReformNow Movement proposes that the inflation-adjusted tax brackets be enacted in this 16th Congress to immediately address this long-standing unfairness in the personal income tax system. This is a simple act of justice that we MUST demand NOW from our leaders in both the Executive and Legislative branches of government.

The P30 billion price tag they put to it will all be worth it... if only to ensure that each and every working Filipino will continue to be taxed at the same rate and receive the same value of net take-home pay in 2015.  Otherwise, Filipino taxpayers will continue to suffer from this injustice until another 2 years when the new Administration comes in and settles down.  And we definitely cannot wait that long anymore.  

Tama na. Sobra na. Income Tax Ibaba! 

Time for #TaxReformNow.

PS - If you believe in this cause by the #TaxReformNow Movement, join the #BlackPayday protest on October 15, 2015. Wear black or change your social media profile pic to black to mourn the unjust, sad state of our current tax system. It's about time for our silent voices to be heard. 

WHY TAX REFORM NOW?

A lot has happened since August of this year on the Tax Reform issue.  

We have seen how our legislators, particularly Cong. Miro Quimbo and Sen. Sonny Angara, pushed hard for their Tax Reform proposals on the adjustment of income tax brackets and the lowering of income tax rates.  We also read about the House Leadership strongly backing them initially on the passage of such Tax Reform proposals.

Then, we heard the President reject outright the calls for Tax Reform by echoing the arguments of the DOF and the BIR, particularly on the budget deficit that will lead to a downgrade by credit rating agencies. In response, TMAP and 17 other broad-based organizations banded together and issued a Unity Statement in support of calls for Income Tax Reform. 

After which, there was a meeting called by the President with Tax Reform champions Cong. Quimbo and Sen. Angara, wherein the President subsequently asked the DOF and BIR to re-study their proposals.  

Suddenly, there was a glimmer of hope that finally, the President might actually listen and heed the call of his bosses. 

But, just very recently, it was disconcerting to hear the House Speaker seemingly having a sudden change of heart by saying that there is no time anymore for the 16th Congress to pass the proposed tax reform measures.

So, where do we go from here? 

There is no denying that everybody agrees that our country badly needs Tax Reform. Even the DOF and BIR oftentimes profess their support for a comprehensive and holistic Tax Reform. Unfortunately for us, this simply means that they agree to Tax Reform in the long-term (when they are no longer around) but, definitely, not now (under their term). 

But then, we ask them, given that we are seeking a comprehensive and holistic Tax Reform -- WHY NOT START NOW?  

To answer this, we have to first acknowledge three (3) Basic Truths on the issue of Tax Reform.

1) The Personal Income Tax (PIT) system is inherently unfair because of unadjusted tax brackets for the past 19 years. 

There is no denying that taxpayers, particularly salaried workers, have long suffered from the issue of "bracket creep" due to failure of previous administrations to index the income tax table to the Consumer Price Index (CPI).   

2) The BIR heavily relies on salaried workers for PIT collections. Self-employed and professionals contribute very little.

80% of PIT collections come from salaried workers.  While the BIR has tried to run after self-employed and professionals with its shame campaign, it still has little success in expanding the tax base and generating more collections from them.  

3) In this age of ASEAN Integration, our income tax system (both for personal and corporate) has lagged behind our ASEAN neighbors in terms of lower income tax rates. 

Through the years, the staggered reduction of income tax rates has become part of the tax policy of our ASEAN neighbors. This has promoted tax competition within the region in order to attract foreign investment and stimulate the economy.  

Given these three (3) Basic Truths, why do Tax Reform advocates, like me, push for Tax Reform NOW? Can we just not wait for the next Administration to come in?  

First of all, Tax Reform advocates do NOT really expect all reform measures to be passed this year. That would be unrealistically impossible!  

Secondly, Tax Reform advocates do support the need for comprehensive and holistic Tax Reform measures to ensure that, at the end of the day, we will have a more fair, progressive and simplified tax system.  A reformed tax system will help ensure inclusive economic development for our country and people.

Lastly, Tax Reform measures which seek to address the issues of broadening of the tax base (through simplification of the tax system) and tax competition (through lowering of tax rates) can come along later.  These measures do require further extensive study and discussion. 

HOWEVER, the call for #TAXREFORMNOW is deemed urgent in addressing the issue of FAIRNESS, particularly in terms of indexing the tax brackets to inflation.

If we already know that there is inherent unfairness in the PIT system because of unadjusted tax brackets, why not act on it at the soonest by indexing them to inflation NOW?  Why continue to perpetuate the unfair tax system and leave it up to the next Administration?  

Also, the proposed adjustment in the tax brackets due to inflation will not change the existing PIT system.  It will remain under "status quo," which is what the DOF and BIR wants until a comprehensive, holistic reform is made. 

The only change is for the underlying tax bracket values in the income tax table. This is no different from what the BIR did under Commissioner Kim Jacinto-Henares at the start of PNoy's term, wherein the BIR adjusted for inflation the VAT-exempt threshold amount.

Under RR 16-2011 dated October 27, 2011, the BIR adjusted for inflation the value of goods and services considered exempt from VAT.  The BIR updated the values just after 5 years -- i.e., from its 2005 values to its 2010 present values at that time. This resulted to reduced VAT collections for the Government AND the BIR did NOT make any fuss about the foregone revenues resulting from the higher VAT-exemption. 

Why then does BIR not do the same in supporting proposals to adjust the tax brackets for individual taxpayers, which will benefit mostly low and middle-income salaried workers? Surely, 19 years of unadjusted values should have merited its attention and quick support.

#TAXREFORMNOW is not an unreasonable populist call, as some would like to paint it. It is not there just for "pogi" points of legislators who have been pushing for it right at the start of the 16th Congress, not just in time for this 2016 elections. It is a real response to the plea for justice and mercy on behalf of millions of salaried workers who have long been overtaxed in this inherently unfair tax system.  

Having said this, the Tax Reform measure of indexing the tax brackets to restore fairness in the system could NOT simply wait anymore. Napapanahon na ang pagtatama ng sistema ng pagbubuwis.  Hindi na ito puedeng ipagpaliban pa.  

As the saying goes, "Justice delayed is justice denied."  

And if our Government would knowingly chooses to ignore this plea, then rest assured that we, the salaried workers, will always remember this Administration for its grave sin of omission, especially this coming elections. 

There is still time to pass a tax reform law, Mr. Speaker.  Pag gusto, may paraan.  Pag ayaw, maraming dahilan.  You just need to enact into law the indexation of tax brackets. That is what is most important at this point.  The other reforms can be handled by the 17th Congress, which hopefully will be more supportive and courageous in pushing for Tax Reform. 

There is still time, Mr. President, to change your mind and heed the voice of your people. Let their cry not be drowned out by the usual rhetorics of the DOF and BIR, which prioritizes short-term revenue collections over long-term equity and growth. Let this single act of Tax Reform be your greatest legacy towards "Tuwid na Daan."

Fellow taxpayers, this Tax Reform advocacy presents to us a once-in-a-lifetime opportunity to realize meaningful changes in the Philippine tax system. It is NOT yet too late. If we let this chance pass us by, it will take at least another two (2) years before we get another crack at Tax Reform. 

Let this be the time to make our voices heard -- #TAXREFORMNOW. May we all never ever give up! 

   

PNOY MOST-WANTED: A LEGACY OF TAX REFORM

As we await for President Benigno S. Aquino's final State of the Nation Address (SONA) to the nation next Monday, July 27, 2015, many taxpayers are hopeful that he will include the Tax Reform Agenda for his final year in office. 

Senator Sonny Angara recently mentioned that lower income taxes will be PNoy's best good-bye gift to the Filipino people as he cited the numerous arguments in favor of it. 

And that is so true.

There had already been a lot of discussion in the past year between legislators, tax experts (led by the Tax Management Association of the Philippines or TMAP) and the DOF on this matter, particularly on the revision and updating of the individual income tax table. 

In fact, during the last hearing at the House of Representatives Ways and Means Committee chaired by Congressman Miro Quimbo, all parties, including the DOF, already agreed on certain principles to make the personal income tax system more equitable. All that has to be done is for our legislators and the DOF to finally agree on a revised personal income tax table with updated tax brackets and effectively lower income tax rates. 

There are still five (5) more months before the year ends. A lot of things can still be done by Congress in passing a law that will jump-start this country's Tax Reform Agenda. 

Many of us, however, believe that Congress can only bravely do so IF AND ONLY IF they get the go-signal from the President who, unfortunately, has been hearing mostly misgivings from his Executive team, which was looking only at its short-term effects.

While it is understandable that the Government's revenue collections will likely go down in the short-term because of the proposed tax cuts, as a leader, PNoy has to look forward and see beyond what is best for this country in the long-term, way beyond his 6-year term which will soon about to end. 

PNoy has already done this for the country's educational system when he supported the Department of Education's (DepEd's) shift to the K-12 program -- this despite the many transition blues in the short-term. Maybe the only difference in this case is that DepEd was bold enough to see beyond the birth pains, believing that this will be good for our educational system and provide more opportunities for our youth in the long-term. 

We continue to hope that, as the President reflects on his last year in office in preparation for his final SONA, he will be brave enough to leave behind a lasting legacy to his people -- that is, a Tax Reform Agenda that will provide, not only immediate relief for many low and middle-class taxpayers who have long been suffering from very high income tax rates but, also provide a roadmap towards developing a tax system that will be more fair and equitable to all concerned.

For it is only when a tax system is perceived to be fair and equitable that taxpayers will willingly contribute their share in nation-building.    

Let's wait and see on Monday if PNoy will grab this historic opportunity. He can choose to look away and pretend not to hear the clamor for tax reform. Or, he can choose to move forward and leave behind that one great legacy of Philippine Tax Reform. 

     

A SALUTE TO LABORERS, OUR HERO-TAXPAYERS!

May 1 is International Labor Day. A day to honor many of us, who are salaried workers and part of the working class.

I do not know what will be the demands of labor groups for this year's Labor Day celebration but, there is one thing that we, salaried workers, can all ask from our legislators and the National Government -- that this, the much-awaited Individual Income Tax Reform. 

Salaried workers are undeniably our Hero-Taxpayers. 

In 2013, out of P246.58B in BIR tax collections from individual taxpayers, P200.77B was contributed by salaried workers through the automatic withholding tax system. That is 81% of the total collections from individual taxpayers! 

Meanwhile, for the same year, out of 14.3M registered individual taxpayers,12M of them (84%) were salaried workers.

Easily, without lifting its finger, the Government immediately collects from the working class the biggest chunk of its tax collections from individuals. Under the withholding tax system, the BIR simply relies on employers to remit the taxes withheld from their employees. 

Despite this, salaried workers are not given the honor due to them as Hero-Taxpayers by making the individual tax system more fair and equitable. 

To-date, the income tax table remains to have outdated income brackets, with the top bracket subject to the maximum income tax rate of 32% being pegged at a measly P500,000. The tax system also remains to be very complicated and the cost of compliance very high, which discourages self-employed and professionals from contributing their fair share of taxes, thereby resulting to a very narrow tax base.

With this, we need to call on our legislators and the National Government to honor our Hero-Taxpayers by seriously pursuing Individual Tax Reform. 

While there was a new law increasing tax-exempt bonuses from P30,000 to P82,000 effective January 1, 2015 for which salaried workers are thankful for, there are pending bills in Congress and proposals submitted by the Tax Management Association of the Philippines (TMAP) that effectively provide for more comprehensive reforms in the individual tax system. 

These ought to be immediately taken up when Congress resumes its sessions this May so that a consolidated bill, particularly on the revision of the individual income tax table, could soon be passed and submitted to the Senate for its concurrence. Once approved by both Houses, there is no justifiable reason why the President should not sign it, even considering the adverse position of the Department of Finance (DOF) and the BIR which stems mainly from the loss of "easy" revenue collections from their end. 

On Labor Day, the best gift that our Government can give to honor our Hero-Taxpayers is an Individual Tax Reform package that will make the system more fair, equitable and simpler. 

Otherwise, with the ASEAN Economic Community (AEC) integration starting 2015, we might as well expect greater Filipino worker mobility, largely driven by our country's very high individual tax rates.  

Mabuhay ang mga Manggagawa...ang mga Buwis-Bayani ng ating bansa! 

THROWBACK THURSDAY: 7 TAKE-AWAYS FROM THE EBIR FORMS SAGA

A day after April 15, we look back at the implementation of the BIR's new electronic platform to review what happened and learn from them so that we can improve on next year's taxpayer filing experience. 

#1: TOO LITTLE TIME

The BIR issued the regulations mandating the use of eBIR forms by certain types of taxpayers less than a month before April 15.  While the eBIR forms have there since September of last year, a mandatory taxpayers can choose between offline and online forms for filing.  Without warning, the BIR suddenly prescribed the use of electronic filing for mandatory eBIR forms taxpayers. 

As such, there was not enough time for the BIR to conduct much-needed taxpayer education and do a cascade/training of the new policy with its personnel on a nationwide basis. This led to widespread confusion among taxpayers and even among BIR personnel.  

Solution: The BIR should have an action plan with reasonable working timeline to implement major projects, such as this mandatory electronic filing for certain categories of taxpayers. Said plan should include among its activities the consultation of various stakeholders in order to anticipate possible issues and concerns from their end. Taxpayer education is also one critical success factor for implementation. 

#2: NATIONAL OFFICE VS. RDOS

While the BIR National Office was saying one thing, BIR RDOs were telling taxpayers another thing. In particular, while it was clear to the BIR National Office that only those seven (7) taxpayer types indicated under mandatory coverage of eBIR forms are required to do electronic filing, the BIR RDOs were requiring all taxpayers to do use eBIR forms and do electronic filing.  There was a breakdown in communication, possibly due to the lack of cascade/training of BIR personnel given the limited time to implement.

Solution: Proper training and cascade of the new policy and procedures among BIR personnel would help prevent miscommunication and minimize confusion between offices. 

#3: DISCRIMINATION BY TECHNOLOGY

IT experts have raised concerns that the BIR electronic platform largely discriminates against many Filipinos because of its preference for certain technologies -- e.g., operating system (Windows vs. Mac), web browser (Internet Explorer vs. Google Chrome), etc.  This is unfortunate because an electronic tax filing platform should be able to accommodate as many taxpayers as possible to make it more useful. 

Moreover, not all taxpayers, especially those with low-income and "No Payment" tax returns, would be computer-literate or would have access to computers. They would have to shell-out money to go to internet cafes, as the BIR even suggested, or hire someone to encode the tax return for them just to be able to comply with the BIR's electronic filing requirement.

Solution: The BIR should design the system to make it more technology agnostic. This is to enable most, if not all, taxpayers to access and utilize its system. 

#4: THE BURDEN OF NO PAYMENT     

Taxpayers with "No Payment" tax returns bore the brunt of the BIR's new electronic filing rule. The electronic platform was supposed to give them convenience in filing their tax returns -- i.e., they need not go to the BIR anymore to line up since they can file the returns in the comfort of their homes (or internet cafes). However, "No Payment" taxpayers could include just about every individual taxpayer. Thus, the BIR had to belatedly issue a clarification via an RMC that senior citizens, persons with disabilities (PWDs) and employees filing form 1700 are exempted from the mandatory coverage of the electronic filing requirement.

Still, many other "No Payment" taxpayers ended up wasting much of their time waiting and trying hopelessly to e-file their tax returns, only to be told two (2) days before the deadline that they can already file their returns manually using the old pre-printed or PDF/Excel file forms. There would have been a lot of rejoicing if not for the major caveat that came along with it -- that they would have to re-file the same tax returns electronically on or before June 15, 2015.  

Solution: The BIR should consider excluding taxpayers with "No Payment" tax returns from among those subject to the mandatory coverage of electronic filing. This is to ease the burden of low-income and low-risk taxpayers from being subject to this administrative burden. 

Alternatively, the BIR may require mandatory electronic filing only for certain specific categories of individual taxpayers (e.g., those business establishments with sales of XX amount, medical professionals, legal professionals, etc.), which have the resources to comply and which the BIR would like to monitor more closely. This targeted approach will be more acceptable, rather than an all-in approach for "No Payment" tax returns. 

#5: LAST MINUTE RMCS

From the time that the BIR's regulation on electronic filing was published on March 17, 2015, the BIR issued 11 Revenue Memorandum Circulars (RMCs) just to clarify the various issues and concerns raised by taxpayers. Foremost among these is RMC 10-2015, which was dated March 24, 2015 while, the latest among these is RMC 20-2015, which was issued in the afternoon of April 15 itself.  

Given that many ordinary taxpayers would not have immediate access to all these RMCs, they largely remained uninformed until after such time, which was already way too close to the deadline and cut-off time. This greatly ran the risk of many taxpayers being subject to the P1,000 penalty and 25% surcharge. 

Solution: The BIR should clearly communicate its policies and procedures prescribed under the governing regulations. There should also be consultation with stakeholders to ensure that most issues and concerns would be properly considered. This is to avoid any misinterpretation or several further clarifications of the provisions under the regulations. 

#6: SYSTEM BONKERS

What is very critical in the implementation of any new IT system is its readiness and actual capability to deliver what it promises -- that is, ease of use and convenience to the taxpayer. However, much is lacking from the eBIR platform, as evidenced by system time-outs and inability of taxpayers to access the system at all. Even the individual ITR forms were not available at all in the online eBIR forms.  

Meanwhile, EFPS taxpayers, who had long been used to the use of an electronic platform, experienced a a complete stand-still in their electronic filing and/or payment procedures two (2) days before the April 15 deadline. This could have been due to the volume of transactions being processed that day, considering the number of new EFPS taxpayers added by the BIR and many tax deadlines falling due on the same day -- i.e., annual ITR, quarterly ITR for individuals, and various types of withholding tax returns.

Considering the value of tax payments that these EFPS taxpayers contribute (being large taxpayers and top 5,000 individual taxpayers), the BIR had to announce manual work-around procedures to allow manual filing and payment on the day itself so as not to miss out on EFPS collections. 

Solution: The BIR should ensure that the system properly works as described under its regulations and other issuances. There should also be adequate testing of the system capability prior to implementation, especially if it involves a significant increase in the volume of transactions to be processed. This is to avoid having a system-breakdown right in the middle of the most critical filing and collection deadline during the year. 

#7: BIR CONVENIENCE

BIR issuances on the new eBIR platform contain policies and procedures, which seem to have been prescribed more for the convenience of the BIR while, putting so much burden on the part of taxpayers. At times, they fail to consider how much time and effort it would take a taxpayer just to comply with their requirements. 

Most significant among these is the requirement for mandatory eBIR form taxpayers to re-file electronically on or before June 15, 2015 the manual returns they already filed on or before April 15. Manual filing came about as a work-around procedure due to technical problems arising from the BIR electronic platform. It was clearly not the fault of the taxpayer that the system was not yet ready for his use on or before April 15. However, he had to rework on his ITR by having it refiled electronically after all the efforts of having it manually filed.  What is even worse, the same penalty will be imposed for failure to refile, similar with not being able to file on the April 15 deadline. 

Solution: The BIR should be more taxpayer-centric by developing policies and procedures, which make it simpler and easier for taxpayers to comply with their tax obligations. This is the only way for the BIR to encourage greater compliance and, in the process, generate higher tax collections. Many individual taxpayers actually take time out and put in a lot of effort just to fulfill their honorable duty to pay their taxes, contrary to some perception that many are simply tax cheats. May the BIR encourage them through simplification of tax policies/procedures and improved taxpayer service. 

With all these in mind, let us honor today all the taxpayers, who bravely navigated and survived through this eBIR forms saga. Let us also honor the tireless BIR personnel, who served beyond duty during the most critical times. 

Our only hope is that we learn from all of these things and work on a more taxpayer-convenient April 15 tax season next year!