Bureau of Internal Revenue Issuances
REVENUE MEMORANDUM ORDERS
REVENUE MEMORANDUM CIRCULARS
RMC No. 87-2024
August 7, 2024
Frequently-asked questions relative to the filing of tax returns and payment of taxes pursuant to Revenue Regulations No. 4-2024, Implementing the Provisions of Republic Act No. 11976, Otherwise Known as “Ease of Paying Taxes (EOPT) Act”
RMC No. 88-2024
August 8, 2024
Publishing the full text of the Memorandum of Agreement between the BIR and the Philippine-Chinese Charitable Association, Inc., owner and operator of the Chinese General Hospital and Medical Center
BIR ADVISORIES
RR 11-Iloilo City will conduct a Public Auction on Forfeited Real Properties on August 28, 2024 at 10:00 AM at the BIR Conference Hall, RDO 75-Zarraga, Iloilo.
The BIR has redesigned their website with a new, user-friendly interface and improved functionality, making it simpler to access the information you need.
Check out their updated website through this link:
https://www.bir.gov.ph/home
Tax Law
Republic Act No. 12001
Official Gazette / June 13, 2024
An act instituting reforms in real property valuation and assessment in the Philippines, reorganizing the Bureau of Local Government Finance, granting of tax amnesty on real property and special levies on real property, and appropriating funds therefor
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Republic Act No. 12001 | Official Gazette of the Republic of the Philippines
Tax And Business Related News
Application of the BIR’s 10-year prescriptive period
The Manila Times / Marion Jasper Tagle / August 5, 2024
If there is one thing that taxpayers would like to avoid receiving from the Bureau of Internal Revenue (BIR), it is definitely a letter of assessment, which signifies that the taxpayer is subject to a tax audit or an investigation by the BIR. When confronted with such, taxpayers should be aware of their rights so that they can properly defend themselves from unwarranted assessments. In a recent case promulgated by the Court of Tax Appeals (CTA) — Case 10098 dated July 12, 2024 — the CTA had the opportunity to further clarify the issue of application of the 10-year prescriptive period following the Supreme Court decision, GR 247737 promulgated on Aug. 8, 2023.
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Application of the BIR’s 10-year prescriptive period | The Manila Times
Lumagui: BIR Illicit Trade Task Force and NBI Operatives Raid Warehouse and Stall in Taytay Tiangge Market, confiscate 7,920 pieces of Flava and other Illicit Vape Products with an Estimated of P6.82M in Tax Liability.
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. reports another successful BIR raid against illicit vape products last August 8, 2024. A total of 7,920 pieces of Flava and other illicit vape products were confiscated in Taytay Tiangge Market, with an estimated P 6.82 Million in tax liability. All vape products seized had no stamps. The stall and warehouse were not registered. The business also did not have a permit to operate and failed to issue official receipts or invoices. These are all violations of the Tax Code, particularly: Section 144 – Tobacco Products, Heated Tobacco Products, and Vapor Products; Section 106 – Value-Added Tax on Sale of Goods or Properties; Section 146 – Inspection Fee; Section 248B – Civil Penalties; Section 249B – Interest; and Section 263 – Unlawful Possession or Removal of Articles Subject to Excise Tax Without Payment of the Tax.
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https://bir-cdn.bir.gov.ph/BIR/pdf/PR53AUG0924.pdf
Navigating VAT recovery under the EoPT Act
Business World / Aubrey Gayle T. Diaz / August 7, 2024
In an effort to make doing business easier, the government introduced significant changes to the Value-Added Tax (VAT) provisions through Republic Act (RA) No. 11976, known as the Ease of Paying Taxes (EoPT) Act. In today’s article, I would like to focus on the revisions to the VAT refund process and the VAT credit for uncollected receivables, examining their implications for businesses.
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Navigating VAT recovery under the EoPT Act – BusinessWorld Online (bworldonline.com)
Recto to BIR: Sustain revenue improvements through digitalization to meet people’s needs and further grow the economy
Department of Finance / August 2, 2024
Finance Secretary Ralph G. Recto has reminded the Bureau of Internal Revenue (BIR) that revenue collections must see sustained improvements through digitalization in order to help the government meet the people’s needs and further grow the economy. The recently established Swift Corporate and Other Records Exchange (SCORE) Protocol––a pilot project of the Securities and Exchange Commission (SEC) and the BIR, allows the swift sharing of data and empowers the Bureau to harmonize records of registered corporations to enhance tax collection efficiency. Secretary Recto affirmed that the partnership is key to the successful rollout of the proposed imposition of value-added tax (VAT) on digital services. Moreover, this system along with other capacity-building measures will facilitate the implementation of new tax laws in the future.
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Recto to BIR: Sustain revenue improvements through digitalization to meet people’s needs and further grow the economy | Department of Finance (dof.gov.ph)
Tax refunds for dissolving companies
Business World / Charisse A. Datiles / August 5, 2024
The Bureau of Internal Revenue is committed to improving the tax refund process. Given the withholding tax rules in the Philippines, it is not uncommon for some corporations to accumulate excess creditable withholding tax. While the option to refund the excess CWTs can be exercised annually, most taxpayers opt to carry forward their excess CWTs in the hope of being able to fully utilize their CWTs without the tedious and sometimes costly refund process. However, when the corporation decides to close its business and undergo the dissolution process, it may be left with significant excess CWTs. Part of the action items in deciding to dissolve the corporation is an evaluation of how the corporation can recover the excess taxes.
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Tax refunds for dissolving companies – BusinessWorld Online (bworldonline.com)
BIR to fast-track system to detect ghost receipts
The Philippine Star / Louise Maureen Simeon / August 8, 2024
MANILA, Philippines — The Bureau of Internal Revenue (BIR) has teamed up with the Ateneo de Manila University to expedite the detection of ghost receipts amid the continued proliferation of fake transactions in various businesses in the country. In a briefing Tuesday afternoon, BIR Commissioner Romeo Lumagui said the agency and Ateneo’s Math Department created an algorithm that would identify ghost receipts with remarkable accuracy. This is part of BIR’s campaign against ghost receipts and tax fraud through the use of mathematics and data analytics.
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BIR to fast-track system to detect ghost receipts | Philstar.com
Travel tax waived at Mindanao, Palawan ports for 3 Asean countries
Inquirer.net / August 9, 2024
Manila, Philippines — President Ferdinand Marcos Jr. has ordered the exemption of travel tax for passengers departing from international airports and seaports in Mindanao and Palawan heading to areas within the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA). According to Marcos in issuing Memorandum Order No. 29, signed by Executive Secretary Lucas Bersamin on August 6, this is to “further sustain and accelerate economic development in Mindanao and Palawan.” The tax exemption will last until June 30, 2028, unless sooner revoked.
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Travel tax waived at Mindanao, Palawan ports for 3 Asean countries (inquirer.net)
Dunkin Donuts franchise ordered to pay P64M in tax deficiencies
Philstar.com / Ian Laqui / August 5, 2024
MANILA, Philippines — The Court of Tax Appeals has ordered Golden Donuts Inc., the company that operates Dunkin’ Donuts in the Philippines, to pay more than P64 million in unpaid taxes. In a decision made public Monday, the appellate tax court partially granted the company’s 2020 petition to nullify and cancel an assessment for income tax, sales tax and value-added tax among other levies for 2010.
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Dunkin Donuts franchise ordered to pay P64M in tax deficiencies | Philstar.com
BIR maintains P3-trillion collection target
Business World / August 1, 2024
The Bureau of Internal Revenue (BIR) said it will maintain its P3.055-trillion revenue target for this year. “Despite the figures mentioned there, this was still not yet transmitted to us, that’s why our collection target is still P3 trillion,” BIR Commissioner Romeo D. Lumagui, Jr. told reporters on the sidelines of an event, referring to a report indicating that the target had been downgraded. The Department of Budget and Management’s Budget of Expenditures and Sources of Financing report released on Monday contained a downgraded BIR collection target of P2.85 trillion for this year.
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BIR maintains P3-trillion collection target – BusinessWorld Online (bworldonline.com)
Recto’s tax efficiency push: Simplify, streamline, and succeed without new laws
Bilyonaryo.com / August 2, 2024
Finance Secretary Ralph Recto has emphasized that enhancing the efficiency of the current tax system is a more effective strategy for boosting government revenue than introducing new tax laws. Speaking at the Bureau of Internal Revenue’s (BIR) anniversary celebration, Recto asserted, “I am committed to the view that we can raise more revenue by simplifying, shortening, streamlining, and expediting the process, rather than enacting additional, complex tax laws.”
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Recto’s tax efficiency push: Simplify, streamline, and succeed without new laws (bilyonaryo.com)
At-large former DOF official in multi-billion tax scam granted lower bail
Rappler.com / August 2, 2024
Manila, Philippines – The Sandiganbayan has allowed the reduction of bail for Asuncion Magdaet, a former finance official involved in the multi-billion peso Tax Credit Certificate (TCC) scam in the mid-1990s. Magdaet, a former tax specialist for the now-defunct Department of Finance One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS Center), was accused alongside the late former finance undersecretary Antonio Belicana of eight counts of graft, and eight counts of estafa due to falsification of public documents.
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At-large former DOF official in multi-billion tax scam granted lower bail (rappler.com)
Italy doubles flat tax for super-rich expats
Inquirer.net / Agence France-Presse /August 8, 2024
Milan, Italy — Italy’s government said Wednesday it would double a flat tax on foreign income for high earners newly moved from abroad, from 100,000 euros ($110,000) to 200,000 euros a year. The original rate, levied for a maximum of 15 years in lieu of other taxes, was introduced in 2017 in a bid to lure wealthy people from overseas, including Italians who had been tax resident elsewhere for many years.
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Italy doubles flat tax for super-rich expats (inquirer.net)
Cebu Pacific earnings dip on lower tax benefits
Manila Bulletin / James A. Loyola / August 8, 2024
Cebu Air Inc., the Philippines’ leading carrier operating as Cebu Pacific Air, reported a 5.4 percent dip in its net income for the first half of 2024 to P3.55 billion from the P3.75 billion earned in the same period last year mainly due to lower tax benefits. In a disclosure to the Philippine Stock Exchange (PSE), the airline said its revenues amounted to P51.44 billion for the period ended June 30, 2024, 18.1 percent higher than the P43.55 billion revenues earned in the same period last year. The increase in revenues is due to the 18.4 percent growth in passenger revenues to P35.68 billion from P30.13 billion generated in the same period last year, due to the overall increase in travel demand.
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Cebu Pacific earnings dip on lower tax benefits (mb.com.ph)
DOF forecasts P279-billion sin tax collection next year
Manila Bulletin / Chino S. Leyco / August 5, 2024
The Department of Finance (DOF) is projecting an uptick in revenues from “sin” products next year, driven by increased collections from alcoholic beverages. Data from the DOF showed that excise tax collections from tobacco and alcohol are estimated to reach P278.97 billion in 2025, an eight percent rise compared to this year’s revised target of P258.89 billion. Of the total sin tax revenues, more than half, or 53.4 percent, is expected to come from tobacco products, while the remainder will be generated from alcoholic beverages.
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DOF forecasts P279-billion sin tax collection next year (mb.com.ph)
Lumagui thanks international business groups for supporting BIR’s programs
Manila Bulletin / Jun Ramirez / August 3, 2024
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. expressed his gratitude to the international business community for their support of the agency’s inclusive approach to international trade and investment in the country. The Joint Foreign Chambers of the Philippines and the Philippine Association of Multinational Companies Regional Headquarters Inc. voiced their support for the BIR’s collection and administrative programs during the agency’s 120th anniversary celebration. The joint chambers include the American Chamber of Commerce in the Philippines, the Canadian Chamber of Commerce in the Philippines, the European Chamber of Commerce in the Philippines, the Japanese Chamber of Commerce and Industry of the Philippines, and the Korean Chamber of Commerce Philippines.
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Lumagui thanks international business groups for supporting BIR’s programs (mb.com.ph)
DOF: Government spends only 52 centavos to collect P100 taxManila Bulletin / Chino S. Leyco / August 2, 2024
Have you ever thought about the cost efficiency of the Bureau of Internal Revenue (BIR) in generating revenue for the government? It only takes 52 centavos to generate P100. During a recent event celebrating the BIR’s anniversary, Finance Secretary Ralph G. Recto highlighted the importance of the tax bureau, which contributes around 70 percent of the national government’s annual income. To put it simply, Recto explains that the BIR needs to collect P8.2 billion daily, equivalent to P342.5 million per hour.
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DOF: Government spends only 52 centavos to collect P100 tax (mb.com.ph)
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