Deadline of tax payments, other charges imposed by LGUs extended – DOF

Robie de Guzman   •   November 10, 2020   •   553

MANILA, Philippines – The Department of Finance (DOF) on Tuesday said it has extended to Dec. 19 the payment of all local taxes, fees, and charges imposed by local government units with deadlines falling on or after Sept. 14 this year.

In a statement, the DOF said the move is in compliance with the provisions of Republic Act 11494 or the Bayanihan to Recover as One Act (Bayanihan 2).

Under Department Circular No. 003-2020 issued by Finance Secretary Carlos Dominguez III, the counting of the period within which to pay local taxes, fees and charges are also suspended until Dec. 19, 2020, including the period for the redemption of real properties sold or forfeited at public auction.

“In the event that an LGU had already extended the deadlines prior to the effectivity of RA 11494, such deadlines, if earlier than 19 December 2020, shall be deemed modified with the period set forth herein. Any further extension of deadlines beyond 19 December 2020 shall be authorized in accordance with the provision of RA No. 7160,” the circular stated.

RA 7160 is the Local Government Code.

As a result of the mandatory extension of these payment limits, no interest, surcharge or any form of penalty shall be applied on any local tax, fee or charge accruing on or due and demandable during the period covering such deadlines, the circular added.

As for local tax delinquencies prior to the effectivity of Bayanihan 2 on Sept. 15, the DOF said all payments shall be due and demandable upon the expiration of the Dec. 19 deadline.

All applicable interests, penalties and surcharges will begin to run again, if due and demandable, after the lapse of the effectivity of Bayanihan 2 on Dec. 19, it added.

The department said Dominguez issued the circular to “provide guidelines on the uniform implementation by LGUs of Section 4 (tt) of the Bayanihan 2 Law, which provides for stretching the statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees and other charges required by law, and the grant of any benefit.

This provision under Bayanihan 2 aims to ease the burden on individuals and enterprises affected by the severe disruption of economic activities resulting from the stringent community quarantines that the national and local governments have imposed to curb the spread of COVID-19.

The circular also directs local treasurers to coordinate with LGU officials to actively inform taxpayers of these mandatory extensions, and to reconfigure the electronic information systems used by local governments for the assessment and computation of such local taxes, fees and charges covered by the circular.

Local treasurers were also ordered to defer activities related to administrative or judicial action for the enforcement and/or collection of local taxes, fees or charges until the lapse of the effectivity of the Bayanihan 2 Law.

They were likewise directed to enable the use of electronic or non-face-to-face payment facilities so that taxpayers who will still opt to pay early may be continuously accommodated by the LGU to ensure physical distancing.

The DOF also ordered LGU treasurers to advise their respective local chief executives on matters concerning the grant of further incentives and/or privileges to taxpayers and business establishments, particularly those extending assistance and providing essential services for COVID-19 response.

DOF OKs inclusion of COVID-19 vaccine imports in express lane for tax processing

Robie de Guzman   •   February 26, 2021

MANILA, Philippines – All importations of COVID-19 vaccines will now be included in the “Mabuhay” or express lane of the Department of Finance to allow quick processing of the tax and duty exemptions of these shipments, the department said.

In a statement issued on Thursday, the DOF said Finance Secretary Carlos Dominguez III approved the inclusion of vaccine imports to allow for the expedited processing of the tax and exemptions for vaccine applications.

Under Department Order 29-94, the Mabuhay Lane is tasked to expeditiously process applications for the tax and duty exemption of certain groups of importers, which include export-oriented firms, returning residents (balikbayans) and non-profit, non-stock educational institutions.

COVID-19 vaccine tax exemption applications in the Mabuhay Lane, which is under the DOF’s Revenue Office, will be processed within 24 working hours, the department said.

These tax exemption policies will be incorporated in the inter-agency guidelines on the implementation of a one-stop shop for international donations and government-procured COVID-19 vaccines, the department added.

Dominguez also approved the waiving of filing fees for COVID-19 vaccine applications under the Mabuhay Lane and the use of the Tax Exemption System Online Filing Module in processing the vaccine imports “to further support the government’s rollout of the COVID-19 vaccination program.”

“We add that the Mabuhay Lane currently processes all Relief Consignment under Section 120 in relation to 121 of the Customs Modernization and Tariff Act (CMTA). The Lane is expected to process all COVID-19 vaccines which may qualify as relief consignment,” Finance Undersecretary Antonette Tionko said.

Relief Consignment refers to goods donated to national government agencies and accredited private entities for free distribution to, or for the use of, victims of calamities.

Under Section 121 of the CMTA, relief consignment imported during a state of calamity and intended for the use of calamity victims shall be exempted from the payment of duties and taxes.

DOF orders BOC to heighten security vs pork smuggling

Aileen Cerrudo   •   February 23, 2021

MANILA, Philippines—The Department of Finance (DOF) has ordered the Bureau of Customs (BOC) to heighten its security against pork smuggling .

Finance Secretary Carlos Dominguez III wants a tighter watch over the possible misdeclaration or misclassification of pork shipments entering the country.

The order was issued after President Duterte approved in principle the recommendation of the Department of Agriculture (DA) to expand the minimum access volume (MAV) allocation for pork imports.

Dominguez said some importers may misdeclare their pork shipments to avoid paying higher import duties. The current tariff on pork within the MAV is at 30 percent, while off-quota imports are taxed a higher 40 percent. 

“Edible offal (entrails) of bovine animals, such as swine, sheep and goats are taxed much lower, which some importers may declare [for their] prime pork shipments to avoid paying higher import duties,” the DOF said in a statement.

Meanwhile, Customs Commissioner Rey Leonardo Guerrero assured that the bureau has been closely monitoring the imports of meat products, including pork and chicken. AAC

Duterte authorizes DOF to firm up US grant for BIR digital transformation

Robie de Guzman   •   January 20, 2021

MANILA, Philippines – President Rodrigo Duterte has authorized the Department of Finance (DOF) to enter into talks with the United States Trade and Development Agency (USTDA) for a possible $809,450 or about P39-million grant to assist the Bureau of Internal Revenue (BIR) in its digital transformation program.

In a statement issued on Wednesday, the DOF said the president has approved its request for a Special Authority designating and authorizing its senior officials “to negotiate and/or facilitate, in accordance with law, for and on behalf of the Government of the Republic of the Philippines (GPH), with the authorized representatives of the USTDA.”

The Special Authority covers the negotiations for an agreement on the grant of $809,450.00 (approximately P38,850,873.20) by the USTDA for the BIR’s Information and Communications Technology (ICT) Modernization Strategy and Data Center Technical Assistance Project.

The DOF said that Duterte also designated and authorized Finance Secretary Carlos Dominguez III or BIR Commissioner Caesar Dulay “to conclude, sign, execute and deliver the said Grant Agreement.”

The BIR project aims to modernize the bureau’s infrastructure and operational environment, it added.

“The project funded by the USTDA grant will ensure an in-depth technical assessment of the BIR’s current ICT environment, the development of an Enterprise Architecture roadmap/framework, and an assessment of the organizational framework of the BIR’s Information System Group (ISG) including recommended restructuring and training programs,” the DOF said.

Dominguez has cited the BIR’s digital transformation efforts as among the factors that led to a dramatic improvement of its services to taxpayers and its robust collection performance ahead of the COVID-19 pandemic-induced crisis.

He said the digitally enhanced administrative reforms being undertaken by the BIR are now beginning to pay off by way of the significant improvement in the country’s tax effort from 13 percent of gross domestic product (GDP) in 2015 to 14.5 percent of GDP in 2019.

The digital switch has also led to the more convenient and efficient electronic filing of tax payments, especially during this coronavirus pandemic, he added.

Starting February 14 last year, the BIR allowed the use of the PayMaya mobile application as an additional electronic payment channel for tax payments.

On top of PayMaya, these other e-payment tools are GCash, LandBank Linkbiz, DBP PayTax, Union Bank Online and PESONet.

The BIR has also improved the tax forms deployed in the e-BIR Forms System to make the filing of tax returns more accessible and convenient to taxpayers.

It began the pilot implementation in April 21 last year of its web-based Internal Revenue Integrated System (IRIS) that will be the central tool and repository to process taxpayers’ information, the DOF said.

The IRIS is targeted to be available nationwide by the end of 2021.

The Finance department added that an Electronic Audited Financial System (eAFS) was also launched last June 1 to allow business taxpayers to electronically submit their financial statements to the BIR.

The BIR also launched on October 19 its eAppointment Facility which aims to enable taxpayers to continue consulting revenue officials on their tax-related concerns even with the mobility restrictions imposed to curb the spread of COVID-19.

In November 2020, the BIR also opened its web-based Procurement, Payment, Inventory and Monitoring System (PPIMS) and its Online Application for Tax Clearance for Bidding Purposes (eTCBP), according to the DOF.

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