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These days, the future appears blurry due to COVID-19. We, in the Philippines, have not been spared from its ill-effects. With the enhanced community quarantine (ECQ) and other preventive measures being implemented, the usual routines of students, workers and businessmen stopped. Our daily lives drastically changed. Worse, most of the households and businesses are incurring bills without earning any income.
To continue addressing this crisis, our government’s lifeline, taxes, must continuously flow in. For us, taxpayers, the first quarter of the year is usually the season for paying local taxes and for preparing financial statements since annual income taxes are due on April 15. The government collects the bulk of its funds during this season. Due to the pandemic, however, the government is in a dilemma on whether to enforce the collection of the much needed taxes vis-à-vis the present situation.
Recently, the Bureau of Internal Revenue (BIR) had to choose between collecting taxes or granting the pleas to extend the tax payment deadlines. Initially, the BIR issued Revenue Memorandum Circular (RMC) No. 25-2020 stating that there shall be no extension on the deadline to file and pay the 2019 Annual Income Tax Returns (AITRs) due on April 15, 2020. But, under the RMC, the BIR allowed that amendments and payments of additional taxes on the amended returns be made until June 15, without imposition of penalties. Further, the BIR enumerated various online and manual methods of payment that can be utilized during the ECQ period.
Thereafter, amid the continuous rise in the number of COVID-19 fatalities and the strict implementation of the ECQ, the BIR changed its tone and issued several RMCs to extend the deadlines for the: 1.) filing and payment of taxes due on the AITRs and other various tax returns, 2.) submissions due to the BIR, and 3.) availment of the tax amnesty for tax delinquencies. As of this writing, the most recent RMCs are the following:
RMC No. 30-2020 amends the previous RMCs on AITRs and clarifies that the deadline for the filing and payment of the 2019 AITR (with the required attachments) is extended until May 15, 2020. It also reiterated that the filing and payment of taxes on all One-Time Transactions which fall due during the ECQ period shall be extended for 30 days from its due date. RMC No. 30-2020 also extends deadlines for other various returns falling due within the ECQ period.
RMC No. 30-2020 also provides a catch-all provision to extend the filing and submission of other reportorial requirements omitted therein (which deadline/due date falls within the ECQ period) for 30 days from its due date. In case the ECQ period is extended, the deadline to file and pay taxes (and the submission of reports and attachments falling with the extended ECQ period) shall be extended by 30 days. The extensions for deadlines/due dates are applicable to the entire Luzon and other jurisdictions which also adopted and implemented the ECQ and other similar measures.
Also, RMC No. 27-2020 and RMC No. 32-2020 extended the deadline for filing applications for VAT refund covering the quarter ending March 31, 2018 until April 30, 2020, and the deadline for filing CORTT Forms for final withholding taxes on dividends, interests, royalties paid on or before March 10, 2020 to April 30, 2020, respectively.
Even if silent on the non-imposition of penalties, the Tax Code provides that penalties and interests are imposed only upon failure to file tax returns and/or pay the taxes due therein within the date prescribed by law. Considering that these RMCs extended the period to file and pay taxes, no penalty and interest should be imposed if the taxes are filed and paid within the extended period.
Further, RMC No. 31-2020 extended the period to submit and/or file certain documents and correspondences (such as the replies and protests to assessment notices) with due dates falling within the ECQ period for 30 days from the date of lifting of the ECQ.
Noting that the deadline for availing of the tax amnesty on delinquencies will be on April 23, 2020, the BIR issued RMC No. 33-2020 extending the deadline until May 23, 2020.
Despite the decreased flow of taxes under the present circumstances, there is no question that our resiliency shall prevail. Bayanihan is apparent nowadays where businessmen and private establishments are extending deadlines to pay bills, donating food and medical supplies, while other government offices are stepping up efforts through distribution of relief goods, and extending deadlines for reportorial requirements and payment of obligations due. With discipline, empathy and positivity, we can rise and expect better days ahead.
This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion. The author is a Senior Associate of the Tax Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW). She may be contacted through [email protected] or (02) 8830-8000.