THE (eBIR) ITR SAGA CONTINUES

Given the confusion brought about by BIR regulations prescribing the use of eBIR forms for ALL non-EFPS taxpayers (see previous blog post dated March 26, 2015), the BIR issued yesterday two (2) Revenue Memorandum Circulars (RMCs) that seek to clarify the many questions posed by taxpayers.

There is RMC 11-2015, which clarified what the BIR meant by including "accredited tax agents/practitioners and all its client-taxpayers" among the mandatory coverage of online eBIR forms. Under this RMC, those required to do the electronic filing are accredited tax agents/practitioners, who are authorized to sign and file the tax returns on behalf of their clients. 

This clarification came about in light of questions posed by many tax accountants who prepare ITRs for their clients. As clarified, when a taxpayer hires a tax accountant/agent to prepare his tax return BUT the same taxpayer signs his own tax return, the client-taxpayer would NOT be required to electronically file his eBIR forms.

Meanwhile, RMC 12-2015 granted much-needed relief to the following taxpayers by allowing them to manually file pre-printed or PDF/Excel file tax returns:

• Senior citizens and persons with disability (PWDs)
• Salaried workers filing BIR Form 1700 with taxes fully withheld by the employer (i.e., no additional tax due)
• Salaried workers who opt to file ITRs, even if they are qualified to no longer file them, due to personal reasons, such as foreign travel, promotion, scholarship, etc.

Considering that the tax risk for these types of taxpayers is very low, it is but proper that they be spared from the new eBIR filing requirement.

While these two (2) latest BIR issuances were able to address certain taxpayer concerns, the call to defer the mandatory use of eBIR forms (be they offline or online) still remains very valid today. 

April 15 is just 15 calendar days away.  With three (3) non-working holidays and four (4) days on a weekend, this gives taxpayers just seven (7) working days to prepare their ITRs before the deadline. 

However, there still is so much confusion on the part of taxpayers on how they can properly comply with the current ITR requirements.  Even BIR RDOs and accredited banks, which are tasked to receive the ITR forms, are confused as to what forms to accept and, to play safe, many of them only accept eBIR forms and refuse all other kind of ITR forms.  

All of these concerns stem from the lack of consultation and adequate time for education of the various stakeholders to the ITR change process, such as the taxpayers, RDOs, and accredited banks. 

The best way to ensure compliance to any new tax rule is by involving stakeholders in the change process. This can only be done by cascading information way beforehand on any forthcoming major change in tax rule or policy.  This will allow the stakeholders in the tax system to fully understand how it impacts them and enable them to plan how they can best comply with it.

The first step toward change is awareness. 

The second step is acceptance. 

~Nathaniel Branden

Today taxpayers continue to call on the BIR to defer the full implementation of the eBIR ITR forms this tax filing season.

In a letter dated March 30, 2015, the Tax Management Association of the Philippines (TMAP) formally requested the BIR to defer the full implementation of the eBIR ITR forms until after April 15, 2015.  TMAP also suggested that, at the very least, it should be made optional at this time with a gradual phase-in implementation.

We continue to hope and pray that the BIR will listen to the voice of confused and weary taxpayers, many of whom would only want to contribute their fair share in nation-building.  

Let us watch as the saga continues to unfold in the coming days.