Banks that refuse to accept tax payments to be punished

REPORT FROM BUSINESSWORLD The Bureau of Internal Revenue (BIR) will penalize banks that refuse to accept tax payments from individuals that do not have an existing account with them. The agency is now drafting a stricter set of rules for banks after taxpayers complained about the practice. "I am reminding all authorized agent banks to accept tax payments from tax filers even if the latter do not have existing bank accounts with them," BIR Commissioner Jose Mario C. Buñag said in a statement on Friday. He said the practice violates the memorandum of agreement signed by the bureau and authorized bank agents. "The BIR is now drafting a revenue regulation to verify compliance of banks. We have also had dialogues with concerned bank branch officials before drafting the regulation now ready for signing by Finance Secretary [Margarito B. Teves]," said Marilou L. del Rosario, BIR head revenue assistant. She noted that out of 1,601 bank branches accredited to receive tax payments, about a third reportedly do not accept payments from non-clients. A BIR official who wished to remain unnamed said the bureau had signed separate memos with the 1,601 bank branches. A bank earns from the arrangement, he added. "There is no reason for banks not to comply with the agreement," the official said. Under the agreement, he said, a bank’s license to collect taxes from corporate taxpayers will be revoked on the third violation. Ms. del Rosario refused to elaborate on the penalties to be imposed by the new rule. Leonilo G. Coronel, Bankers Association of the Philippines (BAP) executive director, admitted that some banks are guilty of not accepting payments from individuals who are not clients. Mr. Bunag, he added, had discussed the issue with the association. "This case usually happens when individual taxpayers come on the last day of filing tax [returns]. That is why we encourage them to pay early," Mr. Coronel said. He noted under the agreement with BIR, a bank must transmit the payment record to the collection agency a day after receiving the tax payment. This gives banks limited time to validate the identity of taxpayers, especially those that do not have a bank account. This discourages some banks to accept payments from outsiders, Mr. Coronel said. The BAP proposed that banks be given more time to validate payments of non-clients. The BIR is bent on collecting tax payments to meet its target of P765.9 billion, P90.5 billion more than its 2006 revenue goal. It fell short of its goal last year by P23.4 billion. The government has set a P63-billion deficit target this year and attain a balanced budget by 2008. — Paolo Joseph L. Lising/BusinessWorld