The Bureau of Internal Revenue (BIR) recently created some alterations to further loosen the registration process for businesses by no longer requiring the mayor’s permit as part of the documentary requirements businesses have to submit. Caesar R. Dulay, Commissioner of the BIR, issued the Revenue Memorandum Circular No. 57-2020 dated March 12 but made public on June 9 that streamlined the new checklist of documentary requirements for business registration and other applications such as those wanting to register their branches or facilities, their employees, ONETT or one-time transactions, books of accounts, and information updates.
The memorandum circular provided that the mayor’s permit no longer needs to be submitted as one of the mandatory requirements due to the revised memorandum circular that further explains the instructions upon the new business registration. Moreover, the updated guidelines included applications for authority to print, permit to use manual loose leaf, issuance of taxpayer identification number (TIN) card, transfer of registration and cancellation of TIN or registration of closure of business.
The requirements for registering a new business with the bureau have been streamlined by removing the Mayor’s Permit as one of the mandatory requirements when the BIR Citizen’s Charter 2019 was published on BIR website.”
The agency emphasized that upon its strict adherence to the fact that the BIR will not review or process any lacking applications and will only proceed to do so with complete ones.
The Bureau shall not process deficient or incomplete application or requirements and shall only process an application if it is complete, pursuant to Rule VII, Section 2(b) of the implementing rules and regulations of Republic Act No. 11032, otherwise known as “Ease of Doing Business and Efficient Government Delivery Act of 2018.”
Easing the application and registration/application process by BIR
Reforms as such to simplify and ease the process of doing business in the country are consistently being taken into account by the BIR. The Anti-Red Tape Authority recently met with the agency’s officials regarding the pursuant nature of BIR to further improve the initiatives and reforms undertaken to refine its service delivery.
According to the World Bank’s Doing Business report released in October 2019, the Philippines shot up to the 95th place after having ranked 124th back in 2018.
The process of filing annual tax returns was extended until June 15 of this year and may now be achieved through online means such as eBIR Forms and Electronic Filing and Payment System facilities. The BIR added that they have also adjusted to the use of electronic payment facilities such as GCash and PayMaya so that people wouldn’t have to go anywhere else to pay.
The coronavirus (COVID-19) pandemic and community quarantine measures surely have affected the process of business registration that the agency has finally allowed taxpayers to file and pay their taxes through the Revenue District Office (RDO) nearest them when previously the process of filing and paying taxes could only be done so by transacting with their assigned RDOs. An extension upon the validity of Electronic Certificate Authorizing Registration (eCAR) from three years to five years was one of the processing alterations as well in the new business registration.
The Department of Finance (DOF) previously reported of the agency’s preparation and readiness upon the release of their electronic invoicing system by the third quarter of this year to modernize the tax administration and collection process.
BIR adamant on taxing online sellers
Online sellers have already been reviewed for taxation as early as 2013 when then BIR Commissioner Kim Henares issued RMC 55-2013 requiring the registration and tax payments of “online business transactions, including online retailing through virtual shopping malls, online marketplaces, webstores and similar websites” or “online stores.”
Henares reiterated that people who conduct online transactions and their “permutations” were required for registration just like other business establishments. These businesses are expected to withhold the required taxes such as their employees’ compensation, file tax returns, and submission of other tax compliance reports.
The BIR warned that the people immersed in online commerce will be penalized under existing laws including the Tax Code once they fail to comply with tax laws, rules, and regulations.
New business registration due to decline of taxes
The collected taxes of the Bureau of Internal Revenue (BIR) last April fell back by a whopping 61.56 percent to P90.5 billion from P235.5 billion in the same month last year, thanks to the extension of tax deadlines caused by the coronavirus outbreak. Through the sifting history of the BIR’s tax collection, April is the month in which the tax collection surges as filing and tax payments are mandated by the Tax Code to be meted out on April 15.
From January to April, BIR’s total collection declined by 20.52 percent year-on-year to P559.3 billion.
Do you agree that the updated memorandum circular is to pave way for the easing of the new business registration? Why or why not?