Private enterprises in the country are in an uproar over a directive from the Bureau of Internal Revenue for them to issue new receipts starting July 1 and for the steep penalties to be imposed on those that will fail to comply.
Complainants criticized the timing of the directive, embodied in Revenue Regulation 18-2012 published last January, which they said was hasty and could cause losses especially for small firms.
The controversial revenue regulation states that all businesses operating in the country should have applied for a new authority to print (ATP) receipts with the BIR not later than April 30 and should issue and use the new set of receipts starting July 1.
Moreover, businesses are required to transact only with a new list of BIR-accredited printing companies. BIR employees and their relatives are disqualified from offering printing services.
Those who failed to apply for an ATP last April 30 faced a penalty of P1,000, while those who will fail to issue new receipts starting July 1 will be slapped a penalty that can go as high as P50,000.
“I am very angry. The penalty of P50,000 is so steep and is already equivalent to a few months worth of net income for our small business. We did not even know about the new BIR directive until a few days ago,” an entrepreneur, who declined to be identified, told the Inquirer when asked to comment on the new BIR ruling. The entrepreneur and her husband run a small printing business.
She said that when her employee went to a BIR branch last April to pay income tax, none of the BIR staff mentioned about the new ruling on receipts.
Sergio Ortiz-Luis, president of the Philippine Exporters Confederation (Philexport) and an officer of the Philippine Chamber of Commerce and Industry (PCCI), said the head offices of the two business groups had been bombarded with calls from various members all over the country inquiring about the new BIR ruling and asking if a request could be made for the BIR to delay the implementation of the directive on receipts.
Ortiz-Luis said majority of businesses in the country were not prepared for the implementation of RR 18-2012.
“We asked the BIR for more time, but they [tax officials] would not listen,” Ortiz-Luis said. “There are a lot of businesses that want to cooperate with the BIR and pay the right taxes. But why can’t they [BIR officials] be more understanding.”
Ortiz-Luis said six months were not enough for the BIR to prepare the entire business community in the country for the implementation of a new directive. He said the BIR should have allotted one to two years before implementing a regulation that requires all enterprises in the country to apply for an ATP and to issue new sets of receipts to replace the old ones.
He said members of Philexport and PCCI acknowledged the reason behind the BIR regulation. However, he said the government should be considerate and take into account the needs of businesses in order to be viable.
The BIR issued RR 18-2012 with the objective of curbing tax evasion and smuggling.
It said the regulation was a necessary reform to address serious problems, including the proliferation of fake receipts that are being sold to tax evaders and smugglers, and unscrupulous acts by some BIR personnel whose relatives used to own receipt printers previously accredited by the BIR. The BIR said it was getting complaints that these personnel were giving taxpayers a hard time securing an ATP unless they tapped these employees’ printing services.
Internal Revenue Commissioner Kim Henares said in a statement issued last week that the revenue regulation would be implemented as scheduled next month.
“The complaints against the new regulations are without any basis. We believe that six months is enough preparation for everyone to comply with such requirement,” Henares said.
Meantime, Ortiz-Luis said some businesses might go to court to formally complain about the timing of the BIR ruling.
“Some businesses may be forced to go to court, but this should not be necessary if the BIR would be a bit considerate. We [government and business sector] do not need to hurt each other,” Ortiz-Luis said.