THE Bureau of Internal Revenue (BIR) is studying exempting small-scale agricultural producers from issuing receipts or invoices to make doing business easier for them.

The BIR on Wednesday released draft revenue regulations exempting the sale of agricultural products from the receipts and invoice requirement.

“Provided, however, that small-scale agricultural producers shall record each sale transaction in a simplified sales book containing the date of transaction, description of goods sold or services rendered, registered name, registered address, Taxpayer Identification Number (TIN) of the purchaser if engaged in business, amount of sales, amount withheld if any, and the net amount received,” according to the draft rule. 

It also noted that if the gross sales or receipts exceed P1 million at any time during the taxable year, the producer will be required to issue official receipts or sales invoices for every transaction valued at P100 or more.

The draft rule defined small-scale agricultural producers as suppliers, sellers, producers, contract growers and millers of agricultural products whose annual gross sales or receipts for tax purposes do not exceed P1 million.

It also defined agricultural products as crops, livestock, poultry, marine products, and ordinary salt.

“The agricultural products will still be covered by this revenue regulations even if they have undergone the simple processes of preparation or preservation for market, such as freezing, drying, salting, broiling, roasting, smoking, or stripping,” it added.

Small-scale agricultural producers are also now required to register with the BIR, and to archive the simplified sales book for 10 years.

“All simplified sales books shall be kept and preserved by the small-scale agricultural producer for a period of 10 years reckoned from the day following the deadline in filing a return. If a return is filed after the deadline, it shall be reckoned from the day when the last entry was made in the simplified sales book for the taxable year,” it added.

The BIR is also requiring small-scale agricultural producers to file quarterly and annual income tax returns and pay income tax.

“Any taxes withheld by the buyer or purchaser as supported by a certificate of creditable tax withheld at source can be used as tax credit by the small-scale agricultural producer,” it added.

The draft rules also outlined income payments subject to withholding tax.

Income payments made to small-scale agricultural producers not exceeding the cumulative amount of P300,000 within the same taxable year are exempt from withholding tax. However, income payments exceeding that amount will be subject to a withholding tax of 1%.

“The buyer or purchaser is to issue a certificate of income payment not subject to withholding tax (BIR Form No. 2304) for each purchase transaction from the small-scale purchase agricultural producer in two copies indicating the transaction date, registered name, address, TIN of the payor (buyer) and payee (seller),” the BIR said.

“The issued BIR Form No. 2304 will be constituted and treated as the substituted official receipt/sales invoice for purposes of these Regulations. This will likewise serve as evidence of purchases made to substantiate claims for deductible expenses of the buyer or purchaser for tax purposes,” it added.

The BIR also noted that it is accepting comment from the public on the draft revenue regulations until Aug. 18. It is also conducting a public hearing on the draft rules on Aug. 14. — Luisa Maria Jacinta C. Jocson