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Fortune favors the taxpayer… who files on time

On Tuesday last week, the 2020/2021 Bar examinations list of successful examinees was released. I am one of those who made it. Truly, fortune favors the bold, as I and my fellow bar examinees struggled to study and prepare for the Bar exams despite the many challenges brought about by the COVID-19 pandemic, typhoons, and postponements. Just like a taxpayer who is trying hard to meet the April 18, 2022, Annual Income Tax Return (AITR) deadline to avoid penalties for late filing and payment.

The Tax Code provides that a penalty equivalent to 25% of the tax due will be imposed due to the taxpayer’s failure to file a tax return and pay the tax due on time. On top of that, an interest of 12% per annum is also imposed as a penalty.

Fortunately for the taxpayers who filed their AITRs on time yesterday, the BIR had previously released relevant issuances – Revenue Memorandum Circulars (RMC) 42- 2022 and RMC 43-2022.

RMC 42- 2022
In RMC 42-2022, the BIR clarified that the AITR may be amended on or before May 16, 2022, without imposition of interest, surcharge, and penalties. Provided that, a taxpayer whose amended returns will result in overpayment of taxes paid can opt to carry over the overpaid tax as credit against the tax due for the same tax type in the succeeding period or file for a refund.

This is a welcome development for taxpayers who were able to file the AITR on April 18, 2022, as they may subsequently amend their AITR on or before May 16, 2022 without interest, surcharge, and penalties.

RMC 43- 2022
In addition to the above RMC, the BIR also issued RMC 43-2022 which put an end to the confusing provisions of RMC 54-2018 and RMC 46-99.

RMC 54-2018 provides that when an additional tax is due per amended return, the 25% surcharge applies to the additional tax to be paid. On the other hand, in RMC 46-99, it is stated that no 25% surcharge may be imposed in computing for the deficiency tax assessment resulting from a tax audit.

RMC 43-2022 noted clearly that based on the two RMCs, it appears that a taxpayer is unduly penalized for amending tax returns to pay the correct tax due but is unintentionally rewarded if unremitted taxes or the correct tax due is paid only during tax audit, which therefore discourages taxpayers from amending their tax returns to voluntarily pay the correct tax due.

Thus, RMC 43-2022 reconciled these conflicting rules by not imposing the 25% surcharge to an amendment of a tax return if the taxpayer was able to file the initial tax return on or before the prescribed due date of its filing. On the other hand, the 25% surcharge will be imposed on a tax deficiency found during audit if the particular tax return being audited was found to have been filed beyond the prescribed period or due date.

For example, if the taxpayer filed the AITR for taxable year 2021 on April 18, 2022, but subsequently amended the return on Dec. 8, 2022, the surcharge will not be imposed because the initial tax return (filed on April 18, 2022) was filed on the prescribed due date of its filing.

If, however, the taxpayer filed the AITR for taxable year 2021 on June 10, 2022, and on Oct. 31, 2022, the taxpayer is audited by the BIR, if the investigation results in a finding of deficiency income tax, the 25% surcharge will be imposed because the particular tax return being audited was filed beyond the prescribed period or due date.

According to the recent RMCs, taxpayers will be encouraged to immediately amend their AITR to reflect the correct figures, as necessary, without fear of the 25% surcharge.

As a reminder, per the 1997 Tax Code, as amended, within three years from the date of the filing of the tax return, the same may be modified, changed, or amended, as long as no notice for audit or investigation for such return has in the meantime been actually served upon the taxpayer.

Thus, if the taxpayer chose to amend the initial AITR for calendar year 2021 on or before May 16, 2022, per RMC 42-2022, no interest, surcharge, and penalties will be imposed. On the other hand, if the taxpayer subsequently amends the AITR beyond the May 16, 2022 cut-off, the taxpayer may do so without risk of the 25% surcharge as per RMC 43-2022, but interest and compromise penalties may be imposed by the BIR. It is advisable, therefore, for the taxpayers to review the AITRs that they have filed and make the necessary amendments, if any.

Considering the challenges of AITR preparation, by reason of the holidays and various other limitations, and the fact that we are still in a pandemic, the BIR’s recently released issuances are good news for taxpayers. Indeed, fortune favors the taxpayer who files on time.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Lorenzo V. Matibag is a senior associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Vaccinate more people to prevent surge — WHO

PHILIPPINE STAR/ MICHAEL VARCAS

THE PHILIPPINES should vaccinate more people to prevent another surge in coronavirus infections as it moves toward lifting all lockdowns, according to the World Health Organization (WHO).

Local governments should step up their house-to-house vaccination drive to reach more people, WHO representative Rajendra Yadav told a televised news briefing on Monday, noting that less than 70% of people in many villages have yet to get vaccinated.

“We should not rely on the number of cases to know whether we have too much COVID or not,” he said. “We need to focus on increasing our vaccination [rate].

Mr. Yadav said increased “social mixing” during the Holy Week was unlikely to have led to more virus transmissions if people wore face masks, avoided crowds and gathered in fully ventilated areas.

He said active coronavirus infections in the Philippines could hit 300,000 if people ignore health protocols. “We have to prove those numbers wrong, that’s the challenge we face.”

Mr. Yadav noted that in South Korea, whose population is half that of the Philippines, 600,000 people get infected each day.

“The good thing is Filipinos are one of the best in wearing masks,” he said. “There was some decline recently in mask-wearing. That should not happen and we have to cover our people with vaccines.”

The WHO official said the organization prefers to use the term “up-to-date with recommended schedules” instead of full vaccination.

“Fully vaccinated is a big term because definitely, it may change depending on evolving evidence. It’s better to use ‘up-to-date with the recommended schedules,’” he added.

He said reaching an endemic stage through widespread infection is “not a great picture.”

“Endemic is not a great picture because many diseases that are endemic like tuberculosis kill millions of people,” Mr. Yadav said. “Rather, we have to aim for sustained suppression of the coronavirus pandemic.”

The Philippines recorded 1,674 coronavirus infections on April 11 to 17, 12% lower than a week earlier, the Department of Health (DoH) said in a statement on Monday.

There were 200 more deaths, 51 of which occurred this month, 21 in March, 35 in February, and 36 in January.

The agency said 664 severe and critical coronavirus patients or 11.5% of total admissions were staying in hospitals.

DoH said 450 or 15.8% of 2,842 intensive care unit (ICU) beds had been used as of April 17, while 4,164 or 16.9% of 24,645 non-ICU beds were occupied.

It added that 66.85 million people had been fully vaccinated against the coronavirus as of April 17, while 12.64 million people have received booster shots.

Meanwhile, the  Health department said the rollout of second booster shots for some sectors had been suspended until the Health Technology Assessment Council (HTAC) gives its final recommendation.

The local Food and Drug Administration has approved the emergency use of booster shots for senior citizens, seriously ill people and health frontliners.

Meanwhile, Japan has given the Philippines a diplomatic loan worth ¥30 billion (P12 billion) to support its pandemic response and economic recovery, the Foreign Affairs department said in a statement.

The second phase of the emergency loan adds to a loan package worth ¥50 billion signed in July 2020.

The latest loan supports government efforts to revive the economy, provide social protection and relief and build public health and economic resilience against future pandemics.

The Japan International Cooperation Agency would explore new ways to deliver its development cooperation programs in response to the Philippines’ immediate needs, according to the statement. — Norman P. Aquino, Kyle Aristophere T. Atienza and Alyssa Nicole O. Tan

Bayan Muna seeks probe of unpaid Marcos estate tax

PRESIDENTIAL MUSEUM AND LIBRARY

BAYAN Muna party-list has filed a resolution asking the House of Representatives to investigate unpaid taxes of the estate of late Philippine dictator Ferdinand E. Marcos.

Bayan Muna Reps. Ferdinand R. Gaite, Carlos Isagani T. Zarate and Eufemia C. Cullamat sought the probe in aid of legislation.

“It has been around 25 years since the Bureau of Internal Revenue (BIR) assessed the estate tax deficiencies on the Marcos estate in 1997 and more than two decades since the Supreme Court ruled with finality on the estate tax deficiency in 1999,” they said. “Yet, no payment has been made by the heirs of Marcos.”

BIR has confirmed that it sent a demand letter to the Marcos heirs in December to pay the estate taxes that have ballooned to more than P200 billion due to interest and other penalties.

“Worse, there is a possibility that this tax deficiency may not be collected at all in the event of another Marcos presidency,” according to a copy of the resolution. The son of the late strongman Ferdinand “Bongbong” R. Marcos, Jr. is leading in presidential opinion polls.

The congressmen cited retired Supreme Court Justice Antonio T. Carpio, who said the written demand for the payment of estate tax deficiencies must be renewed every five years.

Mr. Carpio noted that if Marcos, Jr. wins in the May election, the tax might no longer be collected “to the damage and prejudice of the government.”

The congressmen said the multibillion estate tax could fund much needed aid and social services amid a coronavirus pandemic.

The camp of Mr. Marcos has said the tax case remains pending in court. Marcos lawyer and spokesman Victor D. Rodriguez emphasized that Mr. Marcos was not liable for the estate tax. 

Also on Monday, Partido Federal ng Pilipinas Secretary-General Thompson Lantion said they expect a landslide win for Mr. Marcos.

In a statement, he said Manila Mayor Francisco “Isko” M. Domagoso must have an “enlightened reason” for urging Vice-President Maria Leonor “Leni” G. Robredo to quit the presidential race.

Mr. Domagoso and fellow presidential candidates Senator Panfilo M. Lacson and former National Security Adviser Norberto Gonzales on Sunday accused the vice-president of negative campaigning, as they vowed to continue their election campaigns.

The three are trailing behind Mr. Marcos, the frontrunner in opinion polls, and Ms. Robredo, who is a distant second.

Political analysts earlier said the three focused too much on Ms. Robredo instead of Mr. Marcos, Jr.

Mr. Marcos kept his lead in Pulse Asia Research, Inc.’s presidential opinion poll last month, with 56% of Filipinos saying they would vote for him, even if his rating fell by 4 points. Still in second place was Ms. Robredo, whose rating rose by 9 points to 24%.

She was followed by Mr. Domagoso (8%), Senator and boxing champion Emmanuel “Manny” D. Pacquiao (6%), Mr. Lacson (2%), businessman Faisal Mangondato (1%), former Cabinet official Ernesto C. Abella (0.1%), cardiologist Jose C. Montemayor, Jr. (0.05%) and labor leader Leodegario “Ka Leody” de Guzman (0.02%). Mr. Gonzales got zero.

Meanwhile, opposition group Kabataan Party-list said it was sickening to watch nonadministration candidates ganging up against the opposition frontrunner instead of preventing the return of the Marcoses to the presidential palace.

In a statement, the group said Ms. Robredo would get the most opposition votes for taking a stand against the Marcoses. — Alyssa Nicole O. Tan and Kyle Aristophere T. Atienza

Election commissioner reminds local government candidates on their role in keeping the peace

POLICE REGION 1 OFFICE

AN ELECTION Commissioner on Monday reminded candidates for local posts on their role in maintaining peace in their respective areas to avoid being placed under the control of the Commission on Elections (Comelec).   

“I hope that all local candidates can help us avoid placing your respective areas under Comelec control, Election Commissioner George Erwin M. Garcia said in Filipino in a recorded video of a Comelec peace covenant signing ceremony in Quezon province. 

Under the Philippine Constitution and related rules, the Comelec can exercise direct control over national and local officials or employees, including law enforcement agencies during the campaign period and thirty days thereafter.  

The election body can tap the military, police, and other government agencies as deputies to ensure peaceful elections in particular areas that are deemed under serious threat of violence.   

Further, the election body last week amended its gun ban rules, which included giving authority to the Comelec chief to declare election areas of concern under the agency’s control.  

“It is wrong to think that a Comelec controlled area is against only the incumbent official of the province,” said Mr. Garcia. “When an area is placed under Comelec control, this is against all candidates.”  

He noted that an area placed under Comelec control could drive away investors.  

Mr. Garcia also noted that a visit by Comelec officials does not mean the place is facing peace and security threats.  

“It does not mean that just because we go to a certain place it means that it is a chaotic area,” he said at the ceremony in Quezon. “It only means that we wish to focus on this area.”   

Comelec Chairman Saidamen B. Pangarungan said last week that he would only use his new authority on gun ban exemptions and control declarations in “extreme cases.” 

Interior Secretary Eduardo M. Año earlier said the Philippine National Police has identified 105 towns and 15 cities as election areas of concern. 

Comelec Spokesperson James B Jimenez previously said the agency still has to finalize and validate the list of so-called election hotspots.  

Election Commissioners Marlon S. Casquejo, Aimee P. Ferolino, and Socorro B. Inting voted against the amendment. John Victor D. Ordonez

Vote-counting machine demo, trial balloting to be held at SM malls 

PHILIPPINE STAR/ RUSSELL A. PALMA

DEMONSTRATIONS on the use of vote-counting machines and mock balloting will be held at SM shopping malls nationwide as part of a voter education campaign for the May 9 polls.   

“With this project, we aim to dispel apprehension and fear of some voters regarding the use and security of the vote-counting machines,” Commission on Elections (Comelec) Chairman Saidamen B. Pangarungan said during the partnership signing ceremony with SM Supermalls on Monday, streamed live on Facebook.   

“These are state-of-the-art equipment that have been used by other countries and are engineered to be secure and tamper-proof,he said.   

SMs 78 malls across the country will be participating in the campaign.  

Election Commissioner Marlon S. Casquejo said the demonstrations are intended to help lessen common mistakes made by voters on election day.  

Comelec Spokesman James B. Jimenez said each mall demonstration will have about 800 mock ballots, which will contain fictitious names instead of actual candidates.  

“So, we invite our voters to test them and familiarize themselves with these machines,” Mr. Pangarungan said. “So that when election day comes, we are confident that our votes will be recorded and counted securely.” John Victor D. Ordonez

No classes in public schools on May 2-13 in line with elections 

PHILIPPINE STAR/ MIGUEL DE GUZMAN

STUDENTS in public elementary and secondary schools will have no classes on May 2 to 13 in line with the May 9 elections, the Department of Education (DepEd) announced Monday.   

The break is included in the 2021-2022 school year calendar released by the department in August prior to opening in September.   

This is in line with DepEd Order No. 29, s. 2021 that allocated the specified days for the National election-related Activities of teachers and DepEd personnel,the department said its statement on Monday.   

Teachers are required to report to their respective schools on days within that two-week period even if there are no election-related duties, it said.   

Philippine public schools are used as polling sites while teachers serve in teams as board of election inspectors. DepEd officials stand as supervisors of the boards. MSJ

Robredo vows to review Kaliwa Dam project with community consultations  

VP LENI MEDIA BUREAU

OPPOSITION presidential candidate Vice President Maria Leonor “Leni” G. Robredo on Monday vowed that the construction of a strongly-opposed dam project in the southern part of Luzon would not proceed without the consent of affected sectors should she win, reiterating that community consultations would be an integral part of projects under her administration.  

I am assuring you, we will not deliver any project to you without your consent,she said in Filipino at a campaign rally in Infanta town in Quezon province.  

During the rally, Ms. Robredo was joined by members of an indigenous community who have expressed opposition to the China-funded project.  

Environmental advocates have said that 300 hectares of forested area will be permanently flooded for the dam project, which is expected by the government to become an alternative source of water for the capital region Metro Manila by 2025.  

Ms. Robredo, who vowed to side with indigenous people and uphold due process, cited that the law requires that affected residents in a project site must give their free, prior, and informed consent (FPIC) before any planned construction can proceed.  

Despite opposition from tribal communities and environmental advocates, the project received an environmental clearance certificate in 2019 from the government. Construction, originally set for Jan. 2020 to Dec. 2025, will now start in June.    

Community leaders have said that talks for a memorandum of agreement were railroaded by the government, leaving their concerns unaddressed.  

Terry L. Ridon, convenor of infrastructure think tank Infrawatch, said the next administration should ensure that all government projects undergo community-based consultations and strictly comply with existing laws so as not to waste earmarked government funds.  

“This will afford more efficient project planning as this will already limit the types of projects applicable in areas where the FPIC of communities is required,” he said in a Messenger chat.   

“As an example, a smaller, more limited dam project may be more acceptable than a larger dam which may permanently flood entire ancestral lands of an indigenous community,” he said.  

Representatives of affected communities said during the rally that among popular presidential candidates, only Ms. Robredo has strongly opposed the project. Kyle Aristophere T. Atienza 

BI reports slight passenger traffic increase during Holy Week break

BUREAU OF IMMIGRATION FACEBOOK PAGE

THE BUREAU of Immigration said that it saw a slight uptick in passenger traffic during the Holy Week break.  

In a statement dated Apr. 17 but posted on the BI Facebook page on Monday, Immigration Port Operations Division Chief Carlos B. Capulong reported a slight increase in arriving passengers during Good Friday and Black Saturday.  

“There were a total of 13,783 passengers who arrived on Friday, while a total of 15,234 arrived on Saturday,” he said. “There was a slight rise from the usual 11-12k average arrivals we’ve seen in the past few days.”  

Data from BI show that passenger arrivals at the airport has been averaging at 13,000 to 15,000 daily in April, up from 6,000 to 9,000 in March.  

Mr. Capulong added that immigration officers processed an average of around 12,000 departing passengers last week.  

The bureau said its operations during the Holy week went smoothly.  

Immigration Chief Jaime H. Morente earlier placed immigration officers on high alert due to the expected increase in travelers during the past Holy Week. 

Last week, BI also removed the arrival card requirement for returning Filipinos to simplify processing.  

Mr. Capulong said that arrival or disembarkation cards were no longer needed due to the recent decrease in coronavirus cases in the country.  

The Department of Tourism (DoT) reported that more than 186,000 foreign tourists have arrived since border easing on Feb. 10 for non-visa countries, and for all countries effective April 1.  

The tourism sector’s contribution in 2020 dropped to 5.4% from 12.8% the previous year due to the global pandemic.  

DoT said that over a million workers in the industry were affected by the pandemic. John Victor D. Ordoñez

North Cotabato abaca growers to scale up products with new processing facility

DAR NORTH COTABATO
DAR NORTH COTABATO

A FARMERSgroup in North Cotabato is looking at increased abaca production and scaling up products after recently receiving a new processing and drying facility.   

The P300,000 abaca center given to the Perez ARB Rubber Farmers Association of Barangay Perez, Kidapawan City was under the Department of Agrarian Reforms (DAR) Village Level Farm-focused Enterprise Development (VLFED) program.  

“The enhancement of our abaca processing center posed a great challenge and inspiration to all the members of the organization and abaca farmers in our community. This shows the sincerity in upscaling abaca production and product innovation in our community,association President Allan M. Masibay, Sr. said in a statement released by DAR last week.   

The VLFED program also covers technical skills and capacity-building training for the farmers, product development, and provision of materials necessary for the construction of processing facilities.    

Through the training, our farmers were already producing and selling abaca by-products such as bags, slippers, placemats, bags, and twines, among others,DAR Assistant Regional Director Rodolfo T. Alburo said.  

The program also entitles the abaca farmers to take part in a P2-million project that will establish more nurseries in the area.   

The project, called Environment Responsible Abaca Value Chain to North Cotabato Farmers, is implemented by the World Vision Development Foundation with funding from the government of Singapore. Ram Christian S. Agustin

Red tide alert up in Bolinao, several other areas 

THE BUREAU of Fisheries and Aquatic Resources (BFAR) has raised the red tide alert in several areas across the country based on its latest test results for paralytic shellfish poison.  

The red tide positive areas are: Bolinao in Pangasinan; Milagros in Masbate; Dauis and Tagbilaran City in Bohol; Dumanquillas Bay in Zamboanga del Sur; Litalit Bay, San Benito in Surigao del Norte; and Lianga Bay in Surigao del Sur.  

All types of shellfish and Acetes sp. or alamang gathered from these areas are unsafe for human consumption.  

However, fish, squids, shrimps, and crabs are safe to eat, provided that they are fresh and washed thoroughly and internal organs are removed before cooking.  

A red tide, also referred to as a harmful algae bloom, is made up of microscopic algae or phytoplankton, which are essential to ocean life. 

Paralytic shellfish poisoning is a syndrome that people can develop if they eat seafood contaminated by a red tide.  

Consuming infected shellfish can cause symptoms such as numbness, drowsiness, and respiratory paralysis. Luisa Maria Jacinta C. Jocson 

Tax deadline

PHILIPPINE STAR/ RUSSELL PALMA

STAFF at the Bureau of Internal Revenue office in Intramuros, Manila check papers submitted on April 18, the last day for filing 2021 income tax returns.

Chelsea beats Palace 2-0 to book FA Cup final against Liverpool

CHELSEA’S Ruben Loftus-Cheek scores their first goal. — REUTERS

LONDON — Chelsea reached their third straight Football Association (FA) Cup final with a hard-earned 2-0 win over Crystal Palace at Wembley Stadium on Sunday to set up a showdown with quadruple-chasing Liverpool.

Second-half goals from Ruben Loftus-Cheek and Mason Mount fired Thomas Tuchel’s side to victory in the semifinal and secured a place in the May 14 showpiece match versus Liverpool, who beat Manchester City 3-2 on Saturday.

In their fifth FA Cup final appearance in six years, Chelsea will look to make amends after being runner-up to Leicester City and Arsenal in the last two seasons and also try to avenge their League Cup final loss to Liverpool in February.

After an attritional first hour, a patient Chelsea side finally broke Palace’s stubborn resistance in the 65th minute through substitute Loftus-Cheek, who had replaced the injured Mateo Kovačić midway through the first half.

Kai Havertz’s cross from the right was deflected out to former Palace loanee Loftus-Cheek who hammered a ferocious shot that hit opposing defender Joachim Andersen and flew into the net for the 26-year-old’s first goal of the season.

Mount added a crucial second just over 10 minutes later and sealed the victory for Chelsea, playing Timo Werner’s ball from the edge of the box past Andersen with his first touch and beating goalkeeper Jack Butland with his second.

Patrick Vieira’s Palace had defended well to contain Chelsea until Loftus-Cheek broke the deadlock and were nearly rewarded for a gritty display, with Cheikhou Kouyate twice coming close.

Palace’s talisman Wilfried Zaha was unable to shake off his marker Reece James and make an impact, while Eberechi Eze offered little as a replacement for on-loan midfielder Connor Gallagher, who was unable to play against his parent club.

The win was a tonic for eight-times FA Cup winner Chelsea after Tuesday’s Champions League quarterfinal exit at Real Madrid, where the holder won the second leg 3-2 after extra time but was eliminated 5-4 on aggregate.

It also keeps them in contention to end a turbulent season with silverware when they take on Jürgen Klopp’s Liverpool again next month, having lost 11-10 to them on penalties in the League Cup final in February after a 0-0 draw following extra time.

“I think it took a little deflection but I’ll take it… it’s long overdue,” Loftus-Cheek said of his goal. “It’s been a tough road for me, with injuries and going out on loan.

“We want to get Liverpool back, simple as that. I thought the Carabao (League) Cup final was a fantastic game that could have gone either way. We’re looking forward to it, and hopefully we’ll get our revenge.” — Reuters