By Beatrice M. Laforga, Reporter
THE DEPARTMENT of Finance (DoF) may allow individuals and companies to amend their annual income tax returns (ITRs) without penalties and provide tax refunds, instead of extending the payment deadline amid the pandemic.
“What we could consider is allowing the amendment of returns without penalty, then any excess payments can be carried over or refunded as provided in the code,” Finance Secretary Carlos G. Dominguez III said in a Viber message to reporters on Saturday.
When asked if the DoF will no longer consider extending the deadline, Mr. Dominguez did not respond by the paper’s deadline.
The deadline for filing ITRs for corporate and individual taxpayers is on April 15. Last year, the deadline was moved three times during the strict lockdown in the capital region.
Bureau of Internal Revenue (BIR) Deputy Commissioner for Operations Arnel SD. Guballa on Saturday clarified that the agency is still awaiting policy direction from the DoF regarding a possible extension of the April 15 deadline.
The BIR is aiming to collect P231.57 billion in April, mainly from income tax payments.
Extending the deadline will result in delayed collection of taxes for the government, Maria Lourdes P. Lim, a tax managing partner of Isla Lipana & Co., PwC Philippines, said.
However, Ms. Lim said the government should still move the April 15 deadline to give taxpayers more time to adjust to the new rules under Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, as well as the strict lockdown in Metro Manila and nearby provinces.
“While the extension will result in a delay in revenue collection, I think the circumstances call for it considering the implementation issues and the difficulty in getting all these things done remotely,” said Ms. Lim in a text message over the weekend.
Tax practitioners are seeking a deadline extension, given the short period to adjust to the changes brought by CREATE, which will slash the corporate income tax and streamline tax incentives.
President Rodrigo R. Duterte on Friday signed the CREATE Act, which will slash corporate income tax for small businesses to 20% from 30% starting July 2020. The tax rate for all other companies, meanwhile, will be reduced to 25% starting July 2020 and will be cut further by a percentage point each year from 2023 to 2027 until it reaches 20%.
House Ways and Means Chair and Albay Rep. Jose Ma. Clemente S. Salceda on Sunday urged the government to expedite the release of the implementing rules and regulations for CREATE.
“I will be meeting with BIR, Bureau of Customs, the Investment Promotion Agencies, the Department of Trade and Industry, Department of Finance, and the expanded Fiscal Incentives Review Board (FIRB) to prepare them for their new roles,” he said in a statement.
Mr. Salceda said he will discuss with the agencies the implementation of the tax provisions, as well as prepare the FIRB for its additional obligations under CREATE. — with inputs from G.M.Cortez