Duterte authorizes DOF to firm up US grant for BIR digital transformation

Robie de Guzman   •   January 20, 2021   •   972

MANILA, Philippines – President Rodrigo Duterte has authorized the Department of Finance (DOF) to enter into talks with the United States Trade and Development Agency (USTDA) for a possible $809,450 or about P39-million grant to assist the Bureau of Internal Revenue (BIR) in its digital transformation program.

In a statement issued on Wednesday, the DOF said the president has approved its request for a Special Authority designating and authorizing its senior officials “to negotiate and/or facilitate, in accordance with law, for and on behalf of the Government of the Republic of the Philippines (GPH), with the authorized representatives of the USTDA.”

The Special Authority covers the negotiations for an agreement on the grant of $809,450.00 (approximately P38,850,873.20) by the USTDA for the BIR’s Information and Communications Technology (ICT) Modernization Strategy and Data Center Technical Assistance Project.

The DOF said that Duterte also designated and authorized Finance Secretary Carlos Dominguez III or BIR Commissioner Caesar Dulay “to conclude, sign, execute and deliver the said Grant Agreement.”

The BIR project aims to modernize the bureau’s infrastructure and operational environment, it added.

“The project funded by the USTDA grant will ensure an in-depth technical assessment of the BIR’s current ICT environment, the development of an Enterprise Architecture roadmap/framework, and an assessment of the organizational framework of the BIR’s Information System Group (ISG) including recommended restructuring and training programs,” the DOF said.

Dominguez has cited the BIR’s digital transformation efforts as among the factors that led to a dramatic improvement of its services to taxpayers and its robust collection performance ahead of the COVID-19 pandemic-induced crisis.

He said the digitally enhanced administrative reforms being undertaken by the BIR are now beginning to pay off by way of the significant improvement in the country’s tax effort from 13 percent of gross domestic product (GDP) in 2015 to 14.5 percent of GDP in 2019.

The digital switch has also led to the more convenient and efficient electronic filing of tax payments, especially during this coronavirus pandemic, he added.

Starting February 14 last year, the BIR allowed the use of the PayMaya mobile application as an additional electronic payment channel for tax payments.

On top of PayMaya, these other e-payment tools are GCash, LandBank Linkbiz, DBP PayTax, Union Bank Online and PESONet.

The BIR has also improved the tax forms deployed in the e-BIR Forms System to make the filing of tax returns more accessible and convenient to taxpayers.

It began the pilot implementation in April 21 last year of its web-based Internal Revenue Integrated System (IRIS) that will be the central tool and repository to process taxpayers’ information, the DOF said.

The IRIS is targeted to be available nationwide by the end of 2021.

The Finance department added that an Electronic Audited Financial System (eAFS) was also launched last June 1 to allow business taxpayers to electronically submit their financial statements to the BIR.

The BIR also launched on October 19 its eAppointment Facility which aims to enable taxpayers to continue consulting revenue officials on their tax-related concerns even with the mobility restrictions imposed to curb the spread of COVID-19.

In November 2020, the BIR also opened its web-based Procurement, Payment, Inventory and Monitoring System (PPIMS) and its Online Application for Tax Clearance for Bidding Purposes (eTCBP), according to the DOF.

BIR to probe tax compliance of initial 250 social media influencers

Robie de Guzman   •   September 16, 2021

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is set to launch an investigation into the initial list of 250 social media influencers to check on their tax compliance.

In a report to Department of Finance (DOF) Secretary Carlos Dominguez III, the BIR said that Letters of Authority (LOAs) for the conduct of investigation have been issued to certain social media influencers found to be “top earners.”

The BIR said that social media personalities who earn money from their posts on digital media are classified as self-employed individuals or persons engaged in trade or business as sole proprietors.

Their earnings are generally considered as business income as defined under BIR’s Revenue Memorandum Circular (RMC) No. 97-2021 issued last Aug. 16, the bureau added.

“We encourage them to register, and then we have the profiling of over 250 personalities. We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” BIR Deputy Commissioner Arnel Guballa said in his report to Dominguez.

Under RMC 97-2021 issued in August, social media influencers should pay income tax and percentage tax or, if applicable, the value-added tax (VAT), as mandated under the National Internal Revenue Code (NIRC) and other existing laws.

Based on the Circular, social media influencers are defined as those who derive their income from the following sources:

  1. a) You Tube Partner Program;
  2. b) sponsored social and blog posts;
  3. c) display advertising;
  4. d) becoming a brand representative/ambassador;
  5. e) affiliate marketing;
  6. f) co-creating product lines;
  7. g) promoting own products;
  8. h) photo and video sales;
  9. i) digital courses, subscriptions, e-books;
    j) podcasts and webinars

The Circular states, among others, that social media influencers who receive free goods in exchange for promotions must declare as income the fair market value of these products.

Income treated as royalties from another country, including payments under the YouTube Partner Program, shall likewise be included in the computation of the gross income of the socmed influencer and shall be subject to tax.

“It must be emphasized that the BIR also has the power to obtain information from foreign tax authorities pursuant to the Exchange of Information (EOI) provision of the relevant tax treaties. The BIR has the means to verify their income as it is clothed with a special power to obtain information from its treaty partners. The BIR may safely rely on the data provided by its treaty partners to establish the influencer’s tax liability,” RMC 97-2021 stated.

“The social media influencers are, therefore, advised to voluntary and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation to be conducted by the BIR to avoid being liable for tax evasion and for the civil penalty of fifty percent (50 percent) of the tax or of the deficiency tax,” it added.

In order to avoid the risks of double taxation, the BIR advised social media influencers receiving income from a non-resident person residing in a country, with which the Philippines has a tax treaty, to inform the latter that they are residents of the Philippines, and are, therefore, entitled to claim treaty benefits provided under the relevant tax agreement.

The Circular said social media influencers who “willfully attempt to evade the payment of tax or willfully fail to make a tax return, to supply accurate and correct information or to pay tax” shall, in addition to the payment of taxes and corresponding penalties, be held criminally liable under the Tax Code.

Social media influencers na hindi nagbabayad ng buwis, tinutukoy na — BIR

Robie de Guzman   •   August 24, 2021

MANILA, Philippines — Sinimulan na ng Bureau of Internal Revenue (BIR) ang proseso sa pagtukoy sa social media influencers na maaaring kasuhan dahil sa hindi pagbabayad ng buwis.

Ayon kay Atty. Marisa Cabreros, ang deputy commissioner for legal group ng BIR, bahagi ito ng mandato ng ahensiya na habulin at papanagutin ang mga tax evader.

Ani Cabreros, ang sinumang kumikita sa pamamagitan ng alinmang social media platforms ay obligadong magpa-rehistro at ideklara ang kanilang kinikita sa BIR.

Sakop nito ang mga gumagawa ng online content o nag-eendorso ng mga produkto gaya halimbawa ng mga vlogger o Youtubers.

“Basta lahat po ng ating mga nasa online ang means of kita, kumikita sila binabayaran sila sa kahit anong klase ng serbisyo na ginagawa online… Lahat po ng taxpayers, indibidwal at korporasyon na tumatanggap ng income, in-cash or in-kind na ginagamit ang media site or any other platform at any activity perform on those sites and platform basta kumikita sila,” ani Cabreros.

“Because of it sila po ang tinutukoy natin na kailangang magrehistro, yun nga lang po ang mga famous as example are our Youtubers, yung nag-live streaming sa Facebook, Instagram, Twitter, Tiktok, Reddit, Snapshot and all other platforms po,” dagdag pa niya.

Pero paglilinaw ng BIR, hindi lahat ng social media influencers ay pagbabayarin ng buwis.

Aniya, ang small time social media influencers na may annual net income ng hindi hihigit sa P250,000 ay exempted sa pagbabayad ng tax alinsunod sa Tax Reform for Acceleration and Inclusion Law.

Kaya wala umano silang dapat na ipag-alala at sa halip ay kinakailangan lamang na magparehistro at ideklara ang kanilang negosyo.

“Kaya yung sinasabi ng iba na maliit lang kami wala naman kaming gaanong kinikita pa, wala po silang dapat ikatakot,” ani Cabreros.

Babala ng BIR, maaaring maharap sa kaso ang sinumang social media influencer na hindi magdedeklara ng kanilang kita o kaya ay hindi nagbabayad ng tamang buwis.

Maaari din silang kasuhan sa hindi pagpapa-rehistro, hindi mag-iisyu ng resibo at tax fraud.

Posibleng makulong ng hindi bababa sa anim na taon at pagmultahin ng hanggang P10 miylyon ang sinomang hindi magbabayad ng tamang buwis. RRD (mula sa ulat ni Correspondent Marvin Calas)

DOF assures enough funds for procuring vaccine supply

Aileen Cerrudo   •   June 15, 2021

MANILA, Philippines — The Department of Finance (DOF) on Tuesday (June 15) assured that the national government has enough budget to procure coronavirus disease (COVID-19) vaccine doses.

During the hearing of the Senate Committee of the Whole on the COVID-19 vaccination drive, Finance Secretary Carlos Dominguez III said the government’s P88.6 billion budget is enough to vaccinate 70 million adult Filipinos. This, he said, will cover 149 million vaccine doses.

Dominguez also said that the government will be able to obtain 200 million doses if the private sector will also procure around 25 million doses to be added to the 30 million doses that “are currently in the pipeline for negotiations”.

When asked about the price range for the procurement of vaccines, Dominguez replied it ranges from P323.75 – P1,323.30 per dose. He, however, did not disclose which brands, saying it would violate the non-disclosure agreements with vaccine manufacturers.

Senator Franklin Drilon stated the need for the Senate as well as the public to know the price range of the procured COVID-19 vaccines.

“To be clear, wala po akong sinasabing may nagnakaw. Maliwanag po iyan. Tinatanong ko lang kung magkano ba dahilan sa ito’y obligasyon natin bilang mga senador, obligasyon natin kung paano natin ginagastos ang kanilang pera,” he said.

(To be clear, I was not saying there is corruption. It is clear. What I am asking is how much were the doses since this is our obligation as Senators. It is our obligation to know how we spend public funds.)

“This is a public forum, we cannot disclose publicly. Now if COA [Commission on Audit] wants to audit us, it is open for audit. I personally designed the financing of this involving ADB [Asian Development Bank], AIIB [Asian Infrastructure Investment Bank], and involving World Bank as a double-check. Because they will not pay for that if they see that we are overpaying,” Dominguez said.

The government is also reviewing to have an additional P20 billion to procure doses for the vaccination of children ages 12 to 15 years old. The Department of Budget and Management (DBM) said it already released over P660 billion funds for the government COVID-19 response.

Meanwhile, the first batch of vaccine supply for the private sector will arrive on June 17.

Vaccine Czar Secretary Carlito Galvez Jr. also said that private companies will give excess doses to the local government.

“Most of the private sector indicated to me that they will donate it to the LGU. considering that when we procured the vaccine the intention of the private sector is really to help the government in producing the dosage,” he said. -AAC (with reports from Harlene Delgado)

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