Extension of ITR-filing deadline sought

Tax managers will appeal the Bureau of Internal Revenue’s (BIR) decision to stick with the April 15 deadline for the filing of annual income tax returns (ITRs) despite the one-month quarantine of Luzon to prevent the spread of the COVID-19 disease.

“We are considering appealing for a reconsideration of RMC (Revenue Memorandum Circular) [No.] 25-2020 and requesting an extension,” Tax Management Association of the Philippines Inc. (TMAP) president Romeo Duran told the Inquirer on Wednesday.

Under RMC 25-2020 issued last Monday, the BIR enjoined taxpayers to electronically file their 2019 ITRs to beat the deadline mandated under the Tax Code, while also dangling filing of tentative returns, under which they can still amend and add payments within a 60-day period or until June 15 without penalty.

As early as March 10—before President Duterte announced a community quarantine of Metro Manila, and, later on, an enhanced community quarantine covering Luzon, TMAP, the Association of Certified Public Accountants in Commerce and Industry (ACPACI), the Association of Certified Public Accountants in Public Practice (ACPAPP), the Bankers Association of the Philippines (BAP), and the Philippine Institute of Certified Public Accountants (Picpa) jointly asked Finance Secretary Carlos Dominguez III for a 30-day extension of the ITR-filing deadline.

“The continuing threat of the virus presents challenges to everyone, in almost if not all companies—disrupting business acti­vities and operations in areas such as finance and accounting, human resources, sales, procurement, in fact, in almost all business areas. In our profession, as auditors, as bankers, tax practitioners and accountants of various industries, we are now in a difficult situation because of this crisis; posing a challenge for all of us to deliver our services within the required period and deadlines. Consequently, this will certainly affect significantly our members’ audits of financial statements of companies not only for the year that ended Dec. 31, 2019, but for the upcoming audits of other financial periods as well,” read the letter to Dominguez signed by Duran, ACPACI national president Walter Abela Jr., ACPAPP national president Anita Rodriguez, BAP managing director Benjamin Castillo, and Picpa national president Evelyn Corpuz.

Also furnished with copies of the letter were Internal Revenue Commissioner Caesar Dulay, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, Cooperative Development Authority (CDA) Chair Orlando Ravanera, Insurance Commissioner Dennis Funa, as well as Securities and Exchange Commission (SEC) Chair and chief executive Emilio Aquino.

“While we would like to ope­rate on a business-as-usual basis, these exceptional circumstances brought about by the virus scare are posing a significant impact and risks to our profession, making it impossible to operate as usual because of the abnormal times. While we, together with our clients, are extending our best efforts to address these concerns and mitigate its impact on our operations, the need to control the spread of the virus and to protect the community is taking priority, such that all activities are being undertaken with these objectives in mind. The measures which are being carried out to achieve these objectives are hampering efforts to complete audits—in the same timeline as in previous years. Specifically, guidelines such as the following have already been implemented to protect the health of the people and to contain the spread of the virus: Suspension of conduct of fieldwork and face-to-face mee­tings; enforcing work from home; restriction from access to work or client office in case staff gets sick or show signs of illness; staff needs to be examined by a medical doctor if showing signs of symptoms; shortening of overtime hours; and self-quarantine for staff members who visited certain areas,” the five associations said.

“With the above measures instituted by almost all of our clients and by members of our organizations, we believe that these will definitely impact meeting all tax compliance and accounting reports filing deadlines as our access to clients to obtain information or to provide services are limited (such as people may have taken extended leave, workloads may be too great when they return, etc.) and will not only delay the completion of our work but will also greatly affect the quality of work,” they said.

“In view of the foregoing, we would like to respectfully request your good office for an extension, by at least 30 days, of the due date for the filing of the annual ITR including payment of taxes to the BIR and the submission of the audited financial statements to the SEC, the BSP, the Insurance Commission, and the CDA. After a thorough study and discussions, we felt that such extension, at a minimum, may be adequate to help us meet the deadline without sacrificing the quality of our work and the health and welfare of the community. Furthermore, this will enable us to surmount the rest of the challenges brought about by COVID-19,” they added.