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National Internal Revenue Code of 1997 5th Edition
Have you ever dreaded the hassle of queuing during filing and payment deadlines? Are you too familiar with the busy crowd in the Bureau of Internal Revenue (BIR) office every 15th of April? Although these have been drastically minimized recently due to the COVID-19 pandemic, the solution to ease the burden of paying taxes, while encouraging higher voluntary engagement for tax compliance among taxpayers is still lacking. In fact, the Philippines has been lagging behind the rest of its ASEAN neighbors since 2005. To date, the Philippines is at 7th place of 10 ASEAN countries, and 95th of 190 countries worldwide, scoring roughly 60 out of 100 on the ease of business metrics, despite the recent implementation of tax reforms.
Revenue Memorandum Circular (RMC) 97-2021, which focuses on taxation of income received by social media influencers, was issued last Aug. 16, 2021. Since then, the Bureau of Internal Revenue (BIR) has continued to double its efforts in strengthening the tax compliance of all taxpayers deriving income online.
As the saying goes, when one door closes, another one opens. There is no doubt that the pandemic severely impacted the Philippine Stock Exchange, causing it to dip by 8.6% year-on-year and reach a low of 4,000-level in 2020. But the situation is not as bleak as the numbers present it.
During a Bureau of Internal Revenue (BIR) tax audit, taxpayers avoid, as much as possible, receiving a Final Assessment Notice (FAN) or think of elevating their concerns to the Court of Tax Appeals. These late stages of the tax assessment process mean incurring significant costs and expending effort to challenge the assessment or defend taxpayers’ arguments, with little to no assurance of a reduction or cancellation of the assessment.
Picture this: you do a random search on Google for a nice new pair of shoes you have long decided to buy. At the top of the results page, you see a whole set of shoes, lined up along with their brand names and prices. Sometimes, you can even see products with freebies or, say, a promo code or a buy-one-get-one deal. You click on one specific pair of shoes, and you are automatically directed to a shopping site. Once you have added the shoes to your cart and typed in your payment and shipping info, there is only one thing left to do. You click the “Check Out” button.
THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular 107-2021 on Oct. 18, 2021 providing taxation guidelines on the imposition of taxes on Philippine Offshore Gaming Operations (Pogo) pursuant to Republic Act (RA) 11590 entitled “An Act Taxing Philippine Offshore Gaming Operations.”
With the government hard-pressed for funds to finance economic recovery programs, much of the burden falls on the Bureau of Internal Revenue (BIR) to increase tax collections. It is no wonder that BIR audits are proliferating like TikTok videos. For taxpayers, one of the most common fears is being subjected to a BIR audit. Such audits not only entail substantial investments in time and effort, mainly to prepare supporting documents and legal arguments; they also require strength of character and tremendous patience to see the process to its conclusion.
There is a world of difference pre-pandemic and the so-called “post-pandemic”, and for companies, these differences go all the way to the top. Proactivity is now required of board directors as they strive to simultaneously address business-model disruptions against a slowing global economy, and digitalization against effective management of cyber risks, among numerous other issues.
