#AskTheTaxWhiz: Do we need to use BIR’s electronic filing system?

Mon Abrea
#AskTheTaxWhiz: Do we need to use BIR’s electronic filing system?
The Tax Whiz tells us who must file using the BIR's eFPS, whether taxes can be paid in installments, and how tax avoidance works

Are we all required to pay taxes using the electronic filing and payment system (eFPS)? If not, can we opt to use either eFPS or eBIR? How do we use the eBIRForms? If we don’t have sufficient cash to settle our income tax payable on April 15, is there an installment option? Can we pay using credit card? 

Not all taxpayers are mandated to use the eFPS. Only the following should use the system:

  1. Large taxpayers duly notified by the BIR.
  2. Top 20,000 private corporations duly notified by the BIR.
  3. Top 5,000 individual taxpayers duly notified by the BIR.
  4. Corporations with paid-up capital stock of P10 million.
  5. PEZA-registered entities and those located within Special Economic Zones.
  6. Government offices, in so far as remittances of withheld VAT and business tax is concerned.
  7. Taxpayers, whether individual or juridical entities, identified by the Revenue District Office (RDO) in the Taxpayer Account Management Program (TAMP) per RR 10-2014.

Non-eFPS taxpayers using eBIRForms should print the tax return and pay the tax due through Authorized Agent Banks (AABs), Revenue Collection Officers (RCOs), or GCash.  

Meanwhile, if the tax due exceeds P2,000, you may opt to pay in installments – 50% on or before April 15 and full payment on or before July 15 of the same year.

Is it true that April was declared as Tax Awareness Month? Are there available tax awareness programs to help us further understand our tax system? Does the BIR provide taxpayer assistance to help us comply correctly with all BIR regulations?

In 2005, April was declared as Tax Awareness Month by virtue of Proclamation No. 812, s. 2005, putting a premium on the “value of taxes to our society” and how “taxation plays a pivotal and crucial role in nation building.”

There are programs available to help the public understand the Philippines’ tax system. Aside from the annual kickoff programs of each BIR Regional Office to remind all taxpayers to file and pay income taxes on or before April 15, the BIR has several ongoing tax awareness campaigns including TV and radio jingles being played nationwide.

For your tax inquiries, you can also call or visit BIR offices and proceed to the Taxpayers Assistance Section. As part of our tax advocacy, you may also check our Tax Awareness Month campaign for free taxpayer assistance.

My accountant discouraged me from declaring my true income so I can save on taxes. She said even if I pay the right taxes, the BIR will still find an assessment and collect more taxes during audit. Is that correct? I have been audited for the last 3 consecutive years and honestly, I am paying more penalties and compromises every year. Is there a way to stop the BIR audit and end compromises? How do I avoid taxes without violating our tax laws? 

Your accountant’s advice is incorrect. You can consider looking for another accountant instead.

If you have properly complied with all BIR regulations, declared true profit, and paid your taxes correctly, the BIR will have no basis to assess and to collect more taxes. Hiring a good and honest accountant to help you pay your taxes correctly is actually an investment to protect your business in the long run, without fear of the BIR.

For those who are regularly audited by the BIR, and presumably exposed to compromising and paying under-the-table to settle the increasing assessment, you may want to know about the Citizen Tax Planning (CTP) Certification Program. It is a 3-year tax planning program to help you save millions of pesos from the unnecessary deficiency taxes, penalties, and compromises. It allows you to pay the right taxes without having to compromise or pay more than necessary. 

You need to know more about the taxes you need to pay so you can avoid it legally using the allowable tax saving measures. To know more about this, you can attend the Tax Avoidance Congress (TAC) on Saturday, April 2, at the Sarabia Manor Hotel in San Felix, Iloilo City.

The TAC is the biggest gathering of business owners and professionals who want to learn the art of paying less taxes. During the event, tax experts from the public and private sectors will join forces to share tips and tricks on how to ease the burden of taxation without violating the law. For more details, visit www.spcg.ph.

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com. – Rappler.com

Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon’s tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at consult@acg.ph.

Tax form monitor image from Shutterstock

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