The government has extended the enhanced community quarantine (ECQ) in certain high-risk COVID-19 areas to May 15. In addition, for moderate- and low-risk areas, a modified form of general community quarantine (GCQ) will be implemented beginning May 1. During these extraordinary times, social distancing is the new normal and staying at home is a civic duty. More importantly, more and more people are lending a hand to communities.
The government needs our support to ensure victory against this pandemic now more than ever. However, let us remind ourselves of an equally important civic duty: paying our taxes.
The Supreme Court has held in numerous decisions that taxes are the lifeblood of the nation. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it.
In Revenue Memorandum Circular (RMC) No. 42-2020, the Bureau of Internal Revenue (BIR) laid down the guidelines for filing and paying Annual Income Tax Returns (AITRs) for the taxable year 2019.
Specifically, the RMC provides the following filing and payment instructions for various types of AITR:
1. Manual filers — use the pre-printed return available in the Revenue District Office (RDO) or the downloadable return found in the BIR website or the return in the Offline eBIRForms Package v7.6
a. With tax due/payment
• Pre-printed return available in RDO
Fill out applicable fields then file and pay the return with any Authorized Agent Banks (AAB) or, in places where there are no AABs, to the Revenue Collection Officer (RCO) under the RDO.
• Return downloaded from the BIR website
Print the return and fill-out all the applicable fields then file and pay the return with any AAB or to the RCO under the RDO
• Return in the Offline eBIRForms Package v7.6
Fill out the return then after successful validation print the return and file and pay with any AAB or to the RCO under the RDO
b. Without tax due/payment
• Manual filing is not allowed. The “no payment” return shall be filed through the Offline eBIRForms Package v7.6 by submitting the return online
2. eBIRForms filers/users — use the Offline eBIRForms Package v7.6 in filling out the return.
a. With tax due/payment — after filling-out the return, submit the return online then print the return and the Tax Return Receipt Confirmation (TRRC) from the eBIRForms System. File and pay the return, together with the TRRC, with any AAB or to the RCO under the RDO (if availing of online payment, the AITR shall be submitted online)
b. Without tax due/payment — file the “no payment” return through the Offline eBIRForms Package v7.6 by submitting the return online
3. Electronic Filing and Payment System (eFPS) Filers/Users of the following:
a. BIR Form Nos. 1700, 1701, and 1701A With or without tax due/payment — file thru the Offline eBIRForms Package v7.6 and pay, together with the TRRC, with any AAB or to the RCO under the RDO by following the procedures stated above on item no. 2 (eBIRForms filers/users)
b. BIR Form Nos. 1702-EX, 1702-MX, and 1702-RT With or without tax due/payment — file and pay thru the eFPS facility by using the old version of the returns in the Efps RMC No. 42-2020 also provides alternative modes of online payment for qualified taxpayers.
In addition, Revenue Regulations (RR) No. 10-2020 provide for the extended filing and payment of AITR until May 30. To encourage taxpayers to file and pay before the extended deadlines, Section 4 of RR No. 10-2020 provides that taxpayers who file prior to the extended deadline can amend their returns on or before the extended due date without penalty, even if the amendment results in additional taxes. The BIR was quick to advise that eFPS filers filing within the extended deadlines may disregard the penalties automatically computed under the eFPS and pay only the basic tax due.
With the further extension of the ECQ, Section 3 of RR No. 10-2020 will be operative, as it provides that, if the ECQ period is extended further, the filing and payment of returns and submission of reports and attachments falling within the extended period shall be further extended for 30 calendar days from the lifting of the ECQ. Thus, taxpayers will automatically be given more time to file and pay tax returns. Will this further extension also apply to taxpayers located in low- and moderate-risk areas under GCQ? Looking at the provisions of RR No. 10-2020, it may not, since the term used is “ECQ.” But it would still best if the BIR issues a clarification on this, especially for those areas/regions that are currently for reevaluation, such as Antique, Iloilo and Cebu, among others.
The BIR recently issued several guidelines to address further developments and to ensure the safety of taxpayers. Obviously, the government should be credited for doing its best to accommodate all taxpayers to the extent possible. It would not take me by surprise if the BIR issues another set of guidelines for clarity.
Will authorized agent banks (AABs) be able to manage the influx of taxpayers, especially those who need to file and pay over the counter? Is there a contingency plan in case an AAB cannot accommodate the number of filing and paying taxpayers?
Robust tax collection will support our government in the most important fight of our lives. Contrary to the doctrine from a notable case decided by the US Supreme Court that “the power to tax involves the power to destroy,” I truly believe that, during this time of need, the power to tax is the power to save more lives. By continuing to pray and work together as one nation, let us rise up to the challenge by doing our part and showing the world that Filipinos are indeed world-class champions.
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.
Daryl Matthew A. Sales is a manager of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.