With the recent surge in the number of COVID-19 cases placing Metro Manila, along with other areas, in General Community Quarantine Alert Level 3, the current situation adds to the anxieties that everyone is experiencing during this challenging time. Perhaps, for a moment, we can think of some light vibes to somehow lighten our burden, particularly for taxpayers who have a lot on their plate. 

Some of the beneficial tax issuances that taxpayers may think of as helpful reminders are described below.


One of the main objectives of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is to provide support to businesses in their recovery from unforeseen events, such as an outbreak of communicable diseases or a global pandemic, and to strengthen the nation’s capability to address similar circumstances in the future.

Under the CREATE Act, domestic corporations are now enjoying a lower corporate income tax rate of 25%. Moreover, domestic corporations with net taxable income not exceeding Five Million (P5,000,000) AND total assets not exceeding One Hundred Million (P100,000,000), excluding the land on which the entity’s office, plant, and equipment are situated, currently enjoy a lower corporate income tax rate of 20%.

On the other hand, non-profit hospitals are subject to a tax rate of 10%, provided that from the period beginning July 1, 2020, to June 30, 2023 they are subjected to a lower rate of 1%, as per the CREATE Act. The said tax rates apply also to proprietary educational institutions as per the recently signed Republic Act (RA) No.11635. 


The CREATE Act has also provided VAT exemption on the following COVID-19 related items for transactions beginning January 1, 2021, to December 31, 2023:

  1. Capital equipment, its spare parts, and raw materials, necessary for the production of personal protective equipment (PPE) components such as coveralls, gowns, surgical gloves, dedicated shoes, and shoe covers, for COVID-19 purposes;
  2. All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
  3. Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.

Note further that the exemption is exclusive. Hence, only the medicines and medical devices for COVID-19 with the corresponding dosage strength, form, and route of administration included in the list submitted by the FDA to the Bureau of Internal Revenue (BIR) shall enjoy the said exemption. The updated list can be accessed as attached to Revenue Memorandum Circular (RMC) No. 123-2021, and for the related implementation, taxpayers may refer to RMC 99-2021.  The said RMC also provides for the treatment of certain unutilized VAT that could be carried over to the succeeding taxable quarter/s or be charged as part of cost.

The above is beneficial to reduce the cost of purchasing COVID-19 vaccines, as many corporations are also expediting the implementation of their vaccination programs for their personnel.


As the country continues to progress towards digitalization, the BIR has provided alternatives to aid taxpayers to better comply with existing regulations. Under RMC No. 29-2021, the use of e-signatures is allowed on certain BIR Forms/certificates:

  • BIR Form No. 2304 – Certificate of Income Payment not Subject to Withholding Tax (Excluding Compensation Income);
  • BIR Form No. 2306 – Certificate of Final Tax Withheld at Source;
  • BIR Form No. 2307 – Certificate of Creditable Tax Withheld at Source; and
  • BIR Form No. 2316 – Certificate of Compensation Payment/Tax Withheld.

Allowing the use of e-signatures on the above forms reduces the instances requiring physical contact with employees and suppliers, which is of great help during these times.

Hopefully, the BIR releases issuances that will further expand the coverage of the use of e-signatures.


While some corporations currently employ work-from-home arrangements, there are still instances where physical filing of tax returns/forms is required. This is a challenge, particularly for personnel who will be traveling to and from their homes, offices, and the filing/payment venues.

Fortunately, to help ease this burden, the BIR has issued Bank Bulletin No. 2022-02 on January 10, 2022, a directive for Authorized Agent Banks to accept all tax payments from taxpayers registered under the Revenue District Offices (RDOs) in areas placed under General Community Quarantine Alert Level 3 and higher levels, including out-of-district returns.

With the above resolution, taxpayers may now proceed with the payment of their taxes at the nearest AAB or RCO notwithstanding the RDO jurisdiction. No penalty shall be imposed based on wrong venue filing and payment of taxes. Alternatively, taxpayers may also resort to Mobile Payment platforms such as GCash/PayMaya or Taxpayer Software Provider (TSP)

While acknowledging our resilience, we, as taxpayers, will need all the good things that we can get to overcome our anxieties this pandemic. Our learnings in the past, together with the beneficial tax issuances released by the government, will certainly help ease the burden during these times. Despite uncertainties, taxpayers need to adapt and push through. After all, nothing in this world is certain, except death and taxes.

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.


As published in BusinessWorld, dated 18 January 2022