Although enhanced community quarantine (ECQ) has been extended but modified for another 15 days in COVID-19 hot spots, the Bureau of Internal Revenue (BIR) will no longer push back tax deadlines beyond the latest extensions as the government direly needed money to respond to the pandemic.
The BIR’s Revenue Regulations (RR) No. 11-2020 published early this month provided that “in case of another quarantine extension, defined extended due dates… shall be allowed further extension of 15 calendar days.”
However, Internal Revenue Deputy Commissioner Arnel S.D. Guballa told the Inquirer on Thursday that the BIR will amend this rule.
“There’s still a quarantine. It’s just that we won’t allow an extension,” Guballa said.
“The government needs funds,” Guballa added.
Last Tuesday (May 12), the Cabinet-level Development Budget Coordination Committee (DBCC) slashed the government’s revenue collection target for 2020 to P2.61 trillion from the March projection of P3.17 trillion as the tax take was expected to be weak amid a bad economy.
In December last year, the DBCC programmed tax and non-tax revenues to amount to P3.49 trillion this year, higher than the actual take of P3.14 trillion in 2019.
Guballa said that the BIR will first validate with the DBCC if the agency’s 2020 goal was also reduced.
Last March, the BIR’s 2020 tax-collection target was downscaled to P2.26 trillion from P2.58 billion previously in light of the COVID-19 pandemic’s impact on the economy.
Under RR 11-2020 signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay, the deadline to file and pay 2019 income tax returns (ITRs) was further extended until June 14, a Sunday.
RR 11-2020 amended an earlier regulation by inserting this rule: “If the new extended due dates fall on a holiday or a non-working day, then, the submission and/or filing contemplated herein shall be made on the next working day.”
As such, the actual cut-off date for the June 14 deadline will be on June 15, Monday.
But Dulay had told the Inquirer that taxpayers “should not wait for the last day” to settle their 2019 dues, as they were already given two more months to do so from the mandatory deadline.
Also, RR 11-2020 moved to June 22 the last day to avail of the ongoing tax amnesty on delinquencies, from April 23 originally and the two earlier extensions to May 23 and June 8 following the prolonged ECQ periods.
Besides the 2019 ITR and tax amnesty deadlines, RR 11-2020 also adjusted cut-off dates for 48 other transactions and documents, including value-added tax (VAT) refunds, and tax credit/refund applications, among others.
Last month, the Department of Finance (DOF) reported that the BIR—the country’s biggest revenue agency—collected P480.64 billion from Jan. 1 to April 17, down 32 percent year-on-year and 45.3-percent below target.
During the period April 1-17, the BIR collections reached only P25.01 billion.
In the past, BIR collections peaked in April as the Tax Code mandated the deadline of filing and payment of the previous year’s ITRs on or before April 15.
On the other hand, expenditures on public goods and services were now estimated by the DBCC to hit P4.18 trillion for the entire year, higher than the P4.16 trillion programmed last March as “the emerging disbursement program takes into account the releases for COVID-19 initiatives charged to savings coming from austerity measures, among others.”
The larger expenditures and weaker revenues will inflate this year’s budget deficit of the national government to P1.56 trillion, equivalent to 8.1 percent of gross domestic product—wider than the estimated P990.1 billion or 5.3 percent of GDP last March.