BIR shifting burden to taxpayers? TAX compliance has never been this burdensome, as evidenced by various complaints and uproars from taxpayers that the Bureau of Internal Revenue (BIR) normally shrugs off. There have been numerous BIR regulations and issuances that seemed to have shifted too much burden to the taxpayers; noncompliance therewith even results in imposition of steep penalties. Are these issuances still in line with the BIR’s functions? Are these beneficial to taxpayers or only of convenience to the BIR? How are taxpayers supposed to respond to these seemingly burdensome issuances? Is the power of taxation properly exercised? These are just some concerns taxpayers nowadays ponder on. In analyzing whether or not the BIR unduly shifts burden to taxpayers, an understanding of the role of the BIR and the reason for its issuances is necessary. The BIR and its priorities. The BIR is an administrative agency attached to the Department of Finance mandated to accomplish the following tasks: 1. assessment and collection of all national taxes, fees and charges; 2. enforcement of all forfeitures, penalties, fines and execution of judgments in cases decided in its favor by the Court of Tax Appeals (CTA) and ordinary courts; and 3. administration of supervisory and police powers conferred by the Tax Code, as amended. In order to accomplish its tasks, the BIR is granted certain powers under the Tax Code. Among them are the powers to interpret tax laws, obtain information, examine taxpayers and assess the correct taxes, and prescribe additional requirements. Seemingly burdensome issuances. It is evident that the BIR is exhausting all its powers under the Tax Code to fulfill its mandate. Lately, it has issued revenue regulations and revenue memorandum circulars intended to entrust to taxpayers the duty of monitoring the tax compliance of the latter’s clients and customers, thereby addressing the difficulties encountered by the BIR in doing the monitoring on its own. It has likewise resorted to general invalidation of certain previously approved privileges or documents and thereafter requiring everyone to comply anew. In the process, even taxpayers who have been religiously complying with their obligations are effectively penalized. Invalidation of all rulings issued prior to 1998. As it reviewed some of the rulings issued and found some of them lacking in legal basis, the BIR resorted to a general invalidation of all rulings issued to all taxpayers prior to the 1997 Tax Reform Act, regardless of whether or not their legal bases have been affected by the new law. Reapplication to get a reconfirmation of the tax treatment or tax privilege will definitely entail time and resources. Requirement as to the printing of new sets of official receipts/invoices. Revenue Regulations No. (RR) 18-2012 and Revenue Memorandum Circular No. (RMC) 44-2013 required taxpayers to discard their old official receipts (ORs) or invoices, have new ones printed through accredited printers until Aug. 30, 2013, and submit an inventory listing of unused/unissued ORs and invoices. The purpose of these is to plug loopholes so that instead of the BIR doing tedious audit and investigation on taxpayers, it required that current registration be invalidated and everyone is also mandated to register anew. This requirement entailed additional cost to the taxpayers, and many claimed, resulted in wastage of unused invoices that now have to be discarded. Issuance of old ORs/invoices after Aug. 30, 2013 shall be deemed issuance of invalid receipt, as if no receipts were issued. Apart from the penalty to the issuers of invalid ORs/invoices, purchasers who transact with non-compliant sellers shall be penalized through disallowance as deduction of their purchases/expenses. Hence, purchasers are obliged to ensure that they only transact with BIR-registered sellers with newly-printed ORs/invoices. Requirement to revalidate tax exemption rulings/certifica tes. RMC 4-2013 invalidated all rulings issued prior to Nov. 1, 2012 granting tax exemption to proprietary non-profit hospitals or non-stock non-profit entities operating hospitals under Section 30 of the Tax Code, as amended. These tax-exempt hospitals were required to secure revalidated tax exemption rulings/certificates by submitting the required documents and any additional documents as the circumstances may warrant. Requirement for the validity of protest. RMC 29-2013 requires BIR receiving personnel to enter into the BIR’s database the taxpayer’s filing of protest. Any letter of protest, request for reinvestigation/reconsideration, or other similar communication allegedly filed by any taxpayer but are not included in the database shall be deemed not officially filed and shall not be used as basis for the grant of any request for reinvestigation/reconsideration of any Final Assessment Notice (FAN) or Final Decision on Disputed Assessment (FDDA) issued against the taxpayer. What is seemingly unfair is that this circular imposes a duty on BIR personnel yet works to the disadvantage of the taxpayers’ cause upon the former’s failure to accomplish their task. Requirement for lessors to monitor BIR registration of their lessees. RR 12-2011 requires lessors to submit to the BIR a report, under oath, on the registration profile of their lessees who are engaged in business. This submission shall be made in every Regional District Office (RDO) where the commercial establishment, building or space is located. The BIR hopes to use such information in future investigations to validate the revenues reported by the lessors and the registration profile of the lessees. Penalties are imposed on lessors who failed to comply with the reportorial requirements, willfully provided false information, and knowingly transacted with unregistered taxpayers. We would like to understand that, in this transition period, the BIR finds it necessary to make a strong statement of its seriousness in enforcing the tax laws. In fact, all of these seem to be within the BIR’s powers vested by the Tax Code. If anyone would like to question whether the BIR acted without or in excess of its jurisdiction, this is a matter falling under the realm of the judiciary. Jurisprudence provides that even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it is exercised reasonably and in accordance with the prescribed procedure. If it is not, then the taxpayer has a right to complain, and the courts will then come to his succor. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one’s hard-earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. The government, for its part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power. While the Supreme Court has not ruled that any of these issuances is unconstitutional or beyond the BIR’s jurisdiction, the issuances remain to have the force and effect of law and presumed lawfully exercised. As such, it is imperative for taxpayers not only to act in accordance to the dictates of law and sound morality but to keep themselves informed and always updated to avoid liabilities and imposition of penalties. Let us hope that as compliance levels stabilize, some of these requirements can be eased.
Posted on: Mon, 12 Aug 2013 11:15:46 +0000
Trending Topics
Recently Viewed Topics
© 2015