December 11, 2017 | MANILA, PHILIPPINES

BIR: Time to file electronic tax returns halved

THE Bureau of Internal Revenue (BIR) said improvements to electronic tax forms resulted in an average filing time of 15 minutes during the recently-concluded filing season, compared to 30 minutes a year earlier.

BIR Spokesperson Marissa O. Cabreros said that the 12-page electronic forms were streamlined, and the Bureau also devoted more bandwidth to electronic filing.

“[The form’s] functionality was streamlined. Previously, the time to fill up the form was longer, but now it’s much faster. The bandwidth was expanded so that the transmission would be faster,” said Ms. Cabreros in an interview.

“Generally we can say that it ran smoothly, there were not many issues, a lot of people took advantage of our online tax filing. The lines were not as big as before,” she added.

However, in a memorandum signed by Deputy Commissioner Lanee C. David, certain taxpayers were reported to have encountered system-generated penalties on April 16, even though they paid prior to the deadline.

According to the memorandum, the electronic Filing and Payment System (e-FPS) auto-computed the penalty, as it has not adjusted to the new April 17 deadline to account for April 15 falling on Black Saturday this year.

“Those who filed and paid the tax due with the automatic system-generated penalties last April 16, will (be entitled to) a tax refund and those who ignored the automatic penalties generated by the system, should first amend their tax return prior to submitting the required attachments,” the memorandum read.

The penalties includes a 25% surcharge, and 20% interest per annum.

BIR is tasked to collect P1.829 trillion this year, with collections from income taxes accounting for about 58%, or P1.057 trillion.

BIR Commissioner Caesar R. Dulay meanwhile remained confident that the bureau will hit its April and full-year target, as it is on track with its priority programs.

In a chance interview with reporters yesterday at the Quezon City Revenue Region, Mr. Dulay said that the BIR has been calling on businesses and individuals with existing assessment cases to avail of its compromise settlement program.

“I encourage our taxpayers to avail of the compromise program of the BIR... They settle, pay their taxes, it will be good for them,” said Mr. Dulay.

“If you don’t settle, you can’t get a clearance, you can’t do further business,” he said, adding: “as long as their cases are not closed, we can go as far back as the 2000s.”

Mr. Dulay said separately that the Bureau has yet to develop a case against tobacco and airline magnate Lucio C. Tan, who was accused by President Rodrigo R. Duterte of owing the government almost P30 billion.

Mr. Dulay said the BIR is not aware of any pending tax complaints against Mr. Tan, but said: “Give me a few more days and I’ll look at the records and talk to the assessment people of BIR and probably I can come out with a definite answer.”

“He has to pay. He has to pay. All of them, they have to pay,” Mr. Duterte said of Mr. Tan in a speech before the Filipino community in Qatar, in which he targeted so-called “oligarchs” in the upper tiers of the economy.

“We in the government are taxed at source. I can guarantee you we are all treated equally. No one gets special treatment,” the President said.

Mr. Duterte then disclosed that Mr. Tan offered to fund his presidential bid even near the “last day” of the campaign period -- a gesture that the President said he declined.

“Lucio Tan almost to the last of the campaign was running after me because he wanted to give me money, but I said ‘No,’” he said.

Lucio Tan Group, Inc., the holding firm of Mr. Tan, has interests in tobacco, spirits, banking, airlines and property development. In March, Mr. Tan ranked 501st on the Forbes 2017 billionaires’ list, with an estimated net worth of $3.7 billion.

During the 1990’s, Mr. Tan was charged in a tax evasion case amounting to over P25 billion for allegedly failing to pay the correct taxes in 1990, 1991 and 1992 by allegedly employing nine “dummy” corporations.

In 2006, the Marikina Metropolitan Trial Court dismissed the tax evasion charges against Mr. Tan, citing insufficient evidence.

BusinessWorld requested comment from Mr. Tan’s representatives but they did not respond by deadline time.

According to Section 204 of the National Internal Revenue Code, the Commissioner may arrive at a compromise settlement on any internal revenue tax when: (1) Reasonable doubt as to the validity of the claim against the taxpayer exists; or (2) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.

In cases of financial incapacity, a settlement can be made at a minimum compromise rate equivalent to 10% of the basic assessed tax.

In other cases, the minimum compromise rate is 40%.

“Many parties are seeking compromise settlements, such as the lawyers of Senator [Emmanuel D.] Pacquiao, who has a lot of tax cases,” added Mr. Dulay.

The Commissioner revealed that the BIR met with Mr. Pacquiao’s representatives last month to discuss settlement of his P2.2 billion tax evasion case filed in 2014 -- in which the Senator was accused of failing to pay taxes on his 2008 and 2009 winnings.

“We are still negotiating, which means we have not come to any agreement or figure,” he added. “I hope they’ll come and see me again. I hope they do it fast.”

The BIR is looking to broaden the Compromise Settlement Program for taxpayers, even during the pendency of the assessment process.

“We will go through the figures again and if we are convinced that the BIR’s assessment is doubtful, then we can agree on the 40% compromise settlement, but we can even agree higher if the taxpayer agrees, to streamline the negotiation,” said Mr. Dulay.

Mr. Dulay however refused to disclose other big-name individuals or firms that are currently availing of the compromise settlement, when asked to do so. -- Elijah Joseph C. Tubayan and Ian Nicolas P. Cigaral