Finance department wants accounting board to drop certification requirement

THE DEPARTMENT of Finance (DoF) said it will seek to drop a Board of Accountancy (BoA) requirement for the certification of financial statements, in the name of cutting red tape.

The DoF forwarded its concerns to the Professional Regulation Commission— the body in charge of the BoA — regarding the BoA’s requirement of a certificate of compilation on audited financial statements, along with other documents, to accompany income tax returns, which runs counter to a Bureau of Internal Revenue (BIR) order easing documentary requirements.

Revenue Memorandum Circular 16-2017 dated Feb. 22, signed by Commissioner Caesar R. Dulay stated: “ln line with the government’s thrust (of) improving ease of doing business and streamlining bureaucratic requirements, it is further clarified that only the existing documentary requirements in the filing of Income Tax Returns shall be submitted to the Bureau.”

The DoF said that the BoA argued in a recent resolution that the requirement is “legally allowed under Philippine Accountancy Act of 2004,” and even warned its accountants of penalties provided by law.

The board said “Any person who shall violate any of the provisions of this Act or any of its implementing rules and regulations as promulgated by the Board subject to the approval of the Commission, shall, upon conviction, be punished by a fine of not less than fifty thousand pesos (P50,000.00) or by imprisonment for a period not exceeding two (2) years or both.”

The certification is seen as a burden for some small and medium-sized enterprises (SMEs), according to Finance Undersecretary Antonette C. Tionko.

Ms. Tionko added that BIR’s collection performance could suffer if documentary requirements are burdensome.

“The BoA’s insistence on requiring the submission of the compilation reports is additional red tape and could impede the BIR’s ability to collect taxes, especially now that the Bureau is streamlining and simplifying processes in time for the submission of income tax returns and with many tax filers trying to beat this year’s deadline on April 15,” said Ms. Tionko in a statement.

The Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Institute of Certified Public Accountants (PICPA) earlier complained before the Securities and Exchange Commission ( SEC) about the BoA’s proposal to amend Securities Regulation Code No. 68, which governs the acceptance of audited financial statements.

The chamber called the documents “redundant and unnecessary.”

The government is keen to cut red tape and improve the ease of doing business, in the hope of spurring private investment.

The BIR aims to collect P1.829 trillion this year, with 63% or P1.152 trillion from its largest taxpayers. —