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‘Have a heart,’ BIR told

February 07, 2021 News

The government should reach out and talk to businesses which are already floored and are still being trampled on

Trade groups have knocked on the door of the Bureau of Internal Revenue (BIR) yesterday to secure a breather on tax payments as member firms reel from the ongoing pandemic.

Federation of Philippine Industries (FPI) President Jesus Arranza said the BIR should give consideration to mostly small struggling businesses, 50 percent of which have collapsed, urging the agency to show its heart in helping with the provision of relief.

“BIR should have the heart to at least understand what most businesses are experiencing nowadays, especially those engaged in restaurant and hotel businesses.

Even the flashy hotels such as Shangri-La Makati had folded due to the pandemic,” according to Arranza.

Last 1 February, Makati Shangri-La has “temporarily” stopped operation because of the long lockdowns during the onset of the pandemic and since revenues were not enough to keep operating.

Although the BIR has extended the reprieve such as the tax amnesty on delinquencies, not all can avail of this.

“The government should reach out and talk to businesses which are already floored and are still being trampled on. They must show compassion, especially in these uncertain times. Although the BIR has extended the reprieve such as the tax amnesty on delinquencies, not all can avail of this.

As I understand, once you are being investigated as delinquent, you cannot apply for amnesty,” according to Arranza.

Financial Executives Institute of the Philippines President Francis Lim, for his part, said “the reduced corporate income tax rates under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill will help businesses to cope up with the pandemic.”

In a study conducted by ECCP in the third quarter, respondents called for tax holidays and breaks as well as the extension of tax filing deadlines.

The CREATE bill seeks to lower corporate income tax from 30 percent to 20 percent for small and medium corporations (with net taxable income of P5 million and below, and with total assets of not more than P100 million excluding land); 30 percent to 25 percent for all other corporations; lowered percentage tax from 3 percent to 1 percent for small businesses whose gross sales or receipts do not exceed the VAT-exempt threshold of P3 million (effective 1 July 2021 to 30 June 2023); and lowered minimum corporate income tax from 2 percent to 1 percent (effective 1 July 2021 to 30 June 2023).

Stimuli needed
Meanwhile, the European Chamber of Commerce of the Philippines (ECCP) reiterated that there is an urgent need for tax and other relief measures as most micro, small and medium enterprises which employ majority of Filipinos have incurred huge losses.

“In a study conducted by ECCP in the third quarter, respondents called for tax holidays and breaks as well as the extension of tax filing deadlines, among other key support measures, from the government to cushion the adverse impact of the pandemic to commercial activities,” ECCP president and Republic Cement president and CEO Nabil Francis told the Daily Tribune.

“In addition, the ECCP advocates the immediate passage of stimulus packages and economic reform measures,” he said, citing the CREATE Bill, which was approved on Monday by the Bicameral panel, after the two panels have reconciled contentious provisions of House Bill 4157 and Senate Bill 1357.


Tax amnesty extension
Before the Holiday season last year, Finance Secretary Carlos Dominguez III and BIR Commissioner Caesar Dulay had decided to stretch the deadline for the tax amnesty on delinquencies to 30 June 2021, instead of 31 December 2020.

Under the Tax Amnesty Act of 2019, the last day of availment was originally set 23 April, extending it five times to 23 May, 8 June, 22 June and 31 December. The latest cut-off date was 30 June 2021.

Republic Act 11494, referred to as the “Bayanihan II Act,” also provides for tax reprieve for businesses, allowing the net operating loss carry over for 2020 and 2021 to the next five consecutive taxable years.


By Raffy Ayeng
Source: Daily Tribune