BIR heeds call of business sector to make SIR optional
The Bureau of Internal Revenue on Tuesday, March 31, 2015, issued Revenue Memorandum Circular No. 13-2015 which makes the disclosure of Supplemental Information under BIR Forms 1700 and 1701 optional for calendar year 2014, due for filing on or before April 15, 2015. The issuance came out two working days after seven business and professional organizations led by the Philippine Chamber of Commerce and Industry submitted its position paper opposing the mandatory submission of SIR.
The groups who joined the PCCI in making the clamor are the Employers Confederation of the Philippines (ECOP), the Financial Executives Institute of the Philippines (FINEX), the Management Association of the Philippines (MAP), the Philippine Exporters Confederation, Inc. (PHILEXPORT), the Philippine Institute of Certified Public Accountants (PICPA), and the Tax Management Association of the Philippines (TMAP).
Business groups oppose BIR rule as breach of right to privacy
Philippine business groups led by the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, submitted their joint position paper to the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) last March 27, 2015 to oppose the mandatory submission of the Supplemental Information Return (SIR) as part of the income tax returns (ITRs) of individual taxpayers.
The business groups cited the serious criticism of various sectors on mandatory disclosure, particularly on the violation of the individual’s right to privacy and the Bank Secrecy Deposit Law.
Signatories to the joint position paper were the respective heads of the various business groups, including Alfredo M. Yao of PCCI, Edgardo Lacson of the Employers Confederation of the Philippines, Jaime Ysmael of the Financial Executives Institute of the Philippines, Francisco del Rosario, Jr. of the Management Association of the Philippines, Sergio Ortiz-Luis, Jr. of the Philippine Exporters Confederation, Tita Caluya of the Philippine Institute of Certified Public Accountants and Terence Conrad Bello of the Tax Management Association of the Philippines.
The group also viewed the SIR as a redundant requirement, which imposes additional burden to taxpayers but which will not necessarily add to the tax collections of the BIR. Erroneous declarations in the SIR could also expose the taxpayer to penalties of perjury, just like other tax returns.
Lastly, the business groups also cited the administrative difficulty in complying with said disclosure, considering the nature and details of information required to be reported.
Among the income items required to be reported in the SIR are tax-exempt income items and those which have been subjected to final withholding taxes, such as interest income from banks. The amounts to be reported as income or receipts are the actual amount received, fair market value or net capital gains, as the case may be.
The group further noted that one of the attractions for choosing investments with tax free or net of tax yields is the exemption from the hassle of accounting for and reporting of income received from said investments in the case of individual taxpayers. The requirement to account for and report such income, just like in the case of the mandatory SIR disclosure, negates that advantage.
With this, the group called on the DOF and the BIR to make the submission of the SIR disclosures in the ITR be made optional again starting calendar year 2014. –end-
Romeo “Butch” J. Pajarillo
Click to view the Joint Position Paper:
Should there be other operational issues on this matter, kindly contact Mr. Fidel Villanueva of the Customs Container Control Division (CCCD) through 0905-2276575 or his assistant, Mr. Dennis Tan, through 0917-8108873 or dlouie