IT WAS redundant for the Bureau of Internal Revenue to “extend” from April 15 to May 15 the deadline for the filing of income tax returns using the coronavirus (COVID-19) pandemic as the reason. The deadline has long been extended by law.
The BIR reminder about the deadline is useful, however, considering the urgent need for large sums to fight the COVID-19 scourge while the entire nation is in a state of calamity for at least six months.
Elsewhere, concerned sectors are also warning against using the coronavirus scare to justify violations of civil rights as the administration takes draconian steps to stem the spread of the virus that has infected more than 250,000 people and killed at least 10,000 worldwide.
Way back in 2017, long before the coronavirus broke out in China, the old ITR-filing deadline was already moved to May 15 by the Tax Reform for Acceleration and Inclusion (TRAIN) Act that amended the National Internal Revenue Code (NIRC) of 1997.
There was no need for Senate President Vicente Sotto to call Finance Secretary Carlos Dominguez reportedly to ask that the deadline be extended to May 15 in view of the coronavirus contagion.
The senator cannot be unaware of the TRAIN law (RA 10963) amendment that moved the deadline, because he was a member of the 16th Congress that passed it. But to refresh his memory, we quote the law’s new Section 20 which says:
“Section 74 of the NIRC, as amended, is hereby further amended to read as follows:
“Sec. 74. Declaration of Income Tax for Individuals.—
“(A) In General.— Except as otherwise provided in this Section, every individual subject to income tax under Sections 24 and 25(A) of this Title, who is receiving self-employment income, whether it constitutes the sole source of his income or in combination with salaries, wages and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year on or before May 15 of the same taxable year. x x x
“(B) Return and Payment of Estimated Income Tax by Individuals.— The amount of estimated income as defined in Subsection (C) with respect to which a declaration is required under Subsection (A) shall be paid in four (4) installments. The first installment shall be paid at the time of declaration and the second and third shall be paid on August 15 and November 15 of the current year, respectively. The fourth installment shall be paid on or before May 15 of the following calendar year when the final adjusted income tax return is due to be filed.”
President Duterte signed into law RA 10963 (TRAIN Act), the first package of the Comprehensive Tax Reform Program, on Dec. 19, 2017.
The finance department said Thursday that the deadline was moved to May 15 “to provide relief to taxpayers who will not be able to prepare, let alone file, the necessary ITR documents on or before the original annual deadline of April 15 because of skeletal workforce arrangements and enhanced community quarantine rules that the government has implemented to contain the pandemic.”
The department said it expected a delay and shortfall in tax collections of around ₱145 billion which may have to be covered by more borrowings by the government. Taxpayers are caught between death and debt.
• More TRAIN amendments listed
WE mentioned in our Postscript of Nov. 10, 2019, several TRAIN law amendments, including the resetting of the income tax payment deadline, written into the internal revenue code:
1. Deadline for filing of annual Income Tax Returns: Reset from April 15 to May 15.
2. Personal and additional exemptions: These have been removed. Before TRAIN, there was a personal exemption of ₱50,000 and an additional exemption of ₱25,000 per qualified dependent.
3. PCSO winnings: While prizes in the Lotto and other games of the Philippine Charity Sweepstakes Office used to be tax-free, they are now slapped a 20-percent tax if the prize amount or winning is more than ₱10,000.
4. Stock transactions: Sale of stocks not traded in the Philippine Stock Exchange used to be taxed 5-10 percent. Now the tax is 15 percent. As for stocks traded in the PSE, the tax rate used to be 0.5 percent of the gross trade amount. Now it is 0.6 percent of the gross trade amount.
5. Documentary Stamps Tax: Before, the DST was from ₱0.75 to ₱1.50. The DST has been doubled at ₱1.50 to ₱3.00.
6. Donor’s Tax. Before, the donor’s tax was 2 to 15 percent if the donor and donee are related, and 30 percent if the donation is to a stranger. Now the donor’s tax is a flat rate of 6 percent regardless of the relationship of donor and donee.
Donations or gifts below ₱250,000 are tax-exempt. But donations with value of at least ₱250,000 are taxed using the new rate of 6 percent on the amount in excess of ₱250,000.
7. Estate Tax: Before, under current tax laws, only family homes worth ₱1 million are tax-exempt. Now, the estate tax is a flat 6 percent on the amount in excess of ₱5 million. Estates with a net value of ₱5 million and below will be tax-exempt. Family homes that are valued at no more than ₱10 million will also be exempted.
8. Tax Exemption on 13th Month Pay and Other Benefits: The ceiling used to be ₱82,000. Now it is ₱90,000.
Above summary notes were shared by our Pinoy ’55 brod Ernie Salas. See: https://tinyurl.com/y3jjxa8q