The government has blinked on rules aimed at improving the tax compliance of self-employed professionals, such as lawyers and doctors, amid controversies over their portrayal as tax cheats in state-funded shame campaigns.
The Bureau of Internal Revenue (BIR) on Friday issued a new set of rules covering the service fees of self-employed professionals, asking them to disclose their standard service fees to tax authorities.
Professionals were also told to register their official appointment books containing names and tax identification numbers (TIN) “to promote transparency and eradicate tax evasion among [the ranks of the] self-employed.”
The issued set of rules was a compromise to the proposal the BIR previously made, where it required doctors, lawyers, and other professionals to put up posters in their places of businesses showing their rates to their clients.
“These regulations are issued for the purpose of monitoring the fees charged by professionals, aid the BIR personnel in conducting tax audit, and boost revenue collections in such sectors,” BIR Revenue Regulation No. 4-2014 read.
The new rules require professionals to submit affidavits indicating the rates, manners of billing, and factors considered “in determining their service fees” upon registration each year.
The self-employed would also be required to register their accounts and appointment books before using these ledgers.
The official appointment books should contain the names of their clients, and the dates and times of their respective meetings.
“They are likewise obliged to register their sales invoices and official receipts before using them in any transaction,” the revenue agency said.
In cases where no fees are charged, professionals would still be required to issue receipts showing the 100-percent discount for their clients “as substantiation of the pro bono” service.
The BIR order, signed by Finance Secretary Cesar Purisima, will take effect 15 days from Friday.
Sought for comment, the Tax Managers’ Association of the Philippines (TMAP) welcomed the more relaxed rules, but noted that professionals could still find it hard to comply completely. Paolo G. Montecillo