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Tax bureau offers fresh amnesty

Friday, 10 September 2010 00:00 [ manilatimes.net ]
BY KATRINA MENNEN A. VALDEZ REPORTER

THE Aquino administration has offered to waive surcharges on deficiencies of erring taxpayers in a fresh amnesty aimed at plugging the government’s budget deficit this year. Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares said the agency will waive the surcharges against erring individual and corporate taxpayers provided that they would settle on or before October 29.
“We are willing to forgo surcharges when these erring taxpayers would come forward and amend their respective income tax returns [ITR] until October 29,” Jacinto-Henares said.
Under the abatement program, those who would voluntarily surrender and pay their rightful taxes by providing their amended ITRs would no longer be slapped with surcharges, the BIR chief said.
“Without the abatement program, those who would come to us and finally pay the right taxes, which already became due and demandable are being charged with 25 percent surcharges, while those who are caught by the BIR would be slapped with 50 percent surcharges,” she said.
These surcharges are on top of the 20-percent legal interest that the BIR imposes, which will not be waived under the abatement program.
“But in order to avail of the abatement program these erring taxpayers shall pay in lump sum,” the BIR chief said.
Under the program, taxpayers may settle any delinquent account or assessment by paying an amount equal to 100 percent of the basic tax assessed.
The program includes one-time transactions such as estate tax, donor’s tax, capital gains tax, final withholding tax, expanded withholding tax and documentary stamp tax on the transfer, sale, exchange, or disposition of assets.
However, taxpayers may only avail of the program and avoid criminal prosecution if they have yet to receive a letter of authority from the BIR.
Otherwise, they will not be exempt from paying surcharges, penalties and other charges, not to mention facing a criminal case.
The letter of authority is an official document that empowers a revenue officer to examine and scrutinize a taxpayer’s book of accounts and other accounting records to determine the latter’s correct liabilities.
The issuance of a letter of authority to a taxpayer signals the start of the audit process.
Finance Secretary Cesar Purisima said they have yet to publish a notice on the abatement program.
“There are a lot of erring taxpayers who want to finally pay their respective amount of taxes but are hesitant because of the penalties being imposed by the government. Hence, this is one way of meeting them halfway,” he said.
The government, however, will not waive the legal interest since the erring taxpayers already enjoyed their earnings in the past.
The last time the government offered a similar abatement program was in September 2006.
During that period the government raised P3 billion.
“Of course, we would continually file tax evasion cases every week. The only difference is that these people should not wait until they are discovered by the BIR. Otherwise, they would have to bear the civil and criminal consequences,” Purisima said.
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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.