BIR moves deadline for employee list

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has moved to late next month the deadline for the submission of the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes in a bid to ensure smooth implementation of the recently enacted tax relief measure. In Revenue Memorandum Circular no. 4-2009, dated last Jan. 19, BIR Commissioner Sixto S. Esquivas IV admitted that employers are encountering technical problems in complying with the requirements of the new law, particularly in the submission of the list of employees, due to differences in the data processing programs used. The deadline for the submission of the required statements and returns (BIR Form No. 1604-CF) was moved to Feb. 27 from Jan. 31. "To ensure smooth implementation of the new law, it is imperative that technical infrastructures are in place to provide facility for taxpayers to easily comply with the prescribed reporting requirements and for the Bureau to effectively process the submitted information and monitor taxpayers’ compliance," the order read. "To date, however, technical and systems problems are encountered in the enhancements of the Data Entry Module for the preparation of Alphalists of Employees and the Validation Module to check technical specifications of those using their own extraction programs/excel format/data entry module," it added. The National Internal Revenue Code provides that every employer required to deduct and withhold the taxes from the wages of his employees will submit an Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes on or before Jan. 31 of the succeeding year, complete with the list of his employees or payees. All employers with less than 10 employees are required to submit the said document in hard copy, while employers with 10 or more employees must submit the same in hard and soft copies. Mr. Esquivas noted that they have to take into account the adjustments that employers will have to make, given that the year 2008 is the initial year of the law’s implementation. "There are certain adjustments to be made by employers that include some details for minimum wage earners, as well as those employees availing of substituted filing," he said. Republic Act 9504, or the tax relief law was signed in June last year by President Gloria M. Arroyo, exempts minimum wage earners from income tax. The law also increases personal exemptions for individual taxpayers and additional deductions for qualified dependents. The individual exemption will be raised to P50,000 from P20,000 for single workers, P25,000 for a head of family, and P32,000 for married individuals. The additional exemption for up to four dependents was raised to P25,000 for each from P8,000 currently. The law also provides professionals, self-employed and corporations the option of doing away with the process of itemizing deductions supported by receipts by simply deducting a standard 40% from gross earnings. — Alexis Douglas B. Romero, BusinessWorld