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From Where We Sit

Voluntary assessment and payment program for taxable year 2018

Atty. Eleanor L. Roque Atty. Eleanor L. Roque

Last weekend, I learned how to make self-watering pots out of recycled soda bottles. I was worried that my kangkong (water spinach) cuttings would wither if I put them in pots. Since kangkong is a semiaquatic plant, its soil must be always moist. As I tend to forget my plants when I have deadlines, I had to research on how to keep their water supply constant.

Fortunately, the internet is full of wonderful designs for self-watering pots. I settled on using recycled soda bottles. These are easily available and their design is simple. Now I don’t have to constantly check if the soil is wet. As long as there is water at the bottle’s bottom, I can concentrate on meeting my deadlines and expect enough kangkong to be produced for my next sinigang (stew).

Unfortunately, dealing with tax matters is not as easy.

Most businesses would spend hours going over their tax returns before submitting these to the Bureau of Internal Revenue (BIR). And when BIR examiners come knocking on their doors, they would sometimes find mistakes that would lead to deficiency-tax assessments.

With Covid-19 and its accompanying lockdowns ravaging our economy, the government devised more ways to collect taxes more efficiently and safely. One is the issuance of Revenue Regulations (RR) 21-2020, which provides rules and conditions covering the Voluntary Assessment and Payment Program (VAPP) for taxable year 2018.

Under this program, qualified taxpayers may pay additional taxes voluntarily so they could be exempted from the BIR’s audit for the taxable period and for the tax types it covers. Availing themselves of the VAPP assures them that they can relax and concentrate on growing their business in the new normal.

The VAPP covers the period ending Dec. 31, 2018 and fiscal years ending July 2018 to June 2019. It includes all taxes, even taxes on one-time transactions (ONETT), ONETT-related creditable withholding tax (CWT) and documentary stamp tax (DST).

Taxpayers who erroneously paid or failed to pay such taxes for the covered periods for some reason or another may avail themselves of the VAPP, except those with a final assessment notice; under investigation due to a tax informer’s verified information; with fraud cases; and with pending tax-evasion cases and other similar lawsuits.

Qualified taxpayers may avail themselves of the VAPP from Sept. 21 to Dec. 31, 2020. The program covers these availments:

– Income, value-added, percentage and excise taxes; and DST other than that on ONETT. For this type of availment, taxpayers must pay the higher amount between the voluntary tax payable and the minimum amount payable.

The voluntary tax payable depends on the percentage of increase or decrease in total taxes due from 2017 to 2018. If the net increase is not more than 10 percent, the amount payable shall be the higher figure between 3 percent of 2018 gross sales and 7 percent of 2018 taxable net income; if 11 percent to 30 percent, between 2 percent of 2018 gross sales and 6 percent of 2018 taxable net income; and if more than 30 percent, between 1 percent of 2018 gross sales and 5 percent of 2018 taxable net income.

If the net decrease is not more than 10 percent, the higher amount between 4 percent of 2018 gross sales and 8 percent of 2018 taxable net income is payable; if more than that, the higher between 5 percent of 2018 gross sales and 9 percent of 2018 taxable net income.

Taxpayers must ensure that the actual payable for VAPP is not lower than the minimum amounts payable. For individuals, estates, trusts and other juridical entities that are not a corporation (e.g. cooperative, foundation or general professional partnership), the minimum VAPP payable is P75,000. For corporations, the amount depends on the subscribed capital. It can range from P100,000 to P1 million.

– Final withholding taxes (on compensation, fringe benefits, etc.) and CWT other than that on ONETT. Taxpayers must pay 5 percent of the total basic withholding tax remittance for the taxable period to avail themselves of the VAPP.

– Taxes on ONETT, such as estate and donor’s tax, CGT, ONETT-related CWT and DST. Taxpayers must pay basic tax due of the unfiled tax return or unpaid tax due, plus 5 percent.

Certificate of availment

A taxpayer who availed himself or herself of the VAPP is exempted from the BIR audit for the taxable period and tax types covered. If covered by an ongoing audit, this will be suspended and shall only resume if the availment is found invalid. On the other hand, the letter of authority and assessment notices would be withdrawn and canceled if the availment is valid.

It is thus crucial for the taxpayer to receive the certificate of availment, which proves that he or she availed himself or herself of the VAPP. Within 30 working days from receiving all required documents from the taxpayer, the revenue officer will evaluate these, then endorse these to the reviewing officer (assistant chief or LT office/assistant revenue district officer) and to the chief or LT office/revenue district officer, as the case may be, for approval and signature. The certificate shall be issued within three working days from the application’s approval.

It is not clear what will happen to the application if it is not acted upon within those 30 days. It is also not clear on whether the 30 days cover both review and approval. For those not acted upon within the period, can the taxpayer assume that the availment is approved? After all, a taxpayer who submitted the necessary documents doesn’t deserve to suffer if the BIR failed to act on his or her application within that time.

Assess cost vs benefits

With RR 21-2020, taxpayers should assess if they are willing to pay additional taxes to enjoy the benefits. They must first determine the amount of their tax exposure, if any, in case of a full-blown BIR audit. They should also add the time and cost needed to close it. These amounts — and the sleepless nights they can expect to have — must be compared with the VAPP payable. Besides the additional taxes payable under VAPP, taxpayers must add any amount of tax refund to be waived upon availing themselves of the program.

The VAPP may be a good opportunity for some taxpayers to close their 2018 assessments, which drains energy that is better devoted to their businesses. Like my self-watering pot, availing of the VAPP may give them more time to focus on their deliverables and innovating their products instead of worrying about their assessment cases. But unlike my pot, which did not cost me money or time, availing of the VAPP requires more careful consideration and assessment because of the cost involved. Taxpayers must carefully consider all its aspects before deciding if availing themselves the program would benefit them or not.

Lea Roque is a principal of the Tax Advisory and Compliance Division of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory and outsourcing firms in the Philippines, with 23 partners and more than 900 staff members. We’d like to hear from you! Tweet us: @GrantThorntonPH); “like” us on Facebook: P&A Grant Thornton; and email your comments to or For more information, visit


As published in The Manila Times, dated 09 September 2020