New BIR rule on tax payment seen to benefit small businesses

MANILA, Philippines – Under a new Bureau of Revenue (BIR) rule, banks – not taxpayers – would be held liable for late or unremitted tax payments made through credit, debit, or prepaid cards, the Department of Finance announced on Wednesday, February 15.

The new revenue regulation, approved by Finance Secretary Carlos Dominguez III, amends Revenue Regulation (RR) No. 3-2016 issued under the previous administration.

Under RR 3-2016, taxpayers are held liable if their authorized agent bank (AAB) fails to remit to the BIR on time their tax payment made via credit, debit, or prepaid cards. The new rule shifts this burden to banks.

The rule change is seen to primarily benefit the self-employed and small business owners who usually line up for hours at the BIR to pay their taxes.

Under the new regulation, taxes paid using any of these cards will be deemed already paid by the taxpayer on the date and time appearing on the confirmation receipt issued by the AAB. It will then be the AAB who will be liable for any delays in remittance to the BIR.

“The liability to pay the tax rests upon the AAB-Acquirer considering that from the time of issuance of a valid confirmation receipt to the taxpayer-cardholder, the AAB-Acquirer becomes the trustee of the government with the obligation to remit the payment on time to the BIR,” the new regulation said.

In a memorandum to Dominguez, DOF Undersecretary Antonette Tionko, head of the revenue group, said the new regulation “is a reasonable approach” as the taxpayer “has no control over the actual remittance of the payment to the BIR other than securing a valid confirmation receipt and ensuring that his/her tax payment is paid through a legitimate AAB of the BIR.”

Tionko also pointed out that new rule is consistent with the Memorandum of Agreement between the BIR, the Bureau of Treasury (BTr) and AABs whose obligation to collect “carries with it the responsibility to remit accurately and on time such collections to the BTr.”

Aside from regulatory tweaks, the DOF is also pursuing a comprehensive tax reform that is being debated in both houses of Congress.  The reform aims to lower personal income tax while raising excise tax and reducing valued added-tax (VAT) exemptions to offset the loss in revenue. – Rappler.com