Gov’t makes banks liable for delays in credit card tax payments

The government will soon make banks accountable for the delays in remitting the tax payments made by the public through credit, debit, or prepaid cards.

A new revenue regulation (RR) to be issued by the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) now makes banks, rather than the taxpayer, liable for delays in, or non-remittance of, taxes paid through credit, debit or prepaid cards.

The new RR approved by DOF Secretary Carlos Dominguez III seeks to amend RR No. 3-2016, which makes taxpayers paying via credit, debit, or prepaid card still liable if the authorized agent bank (AAB) failed to remit their payments to the BIR on time.

Under the new RR that was recommended for approval by BIR Commissioner Caesar Dulay, the payment of taxes done via the aforementioned methods shall already be deemed paid by the taxpayer on the date and time appearing in the system-generated confirmation receipt issued by the AAB.

The AAB will then be the one held liable in case of late remittance or non-remittance of such tax payments to the BIR.

"Dominguez’s directive will benefit primarily the self-employed taxpayers and owners of micro, small and medium enterprises (MSMEs) who usually line up for hours at the BIR to pay their taxes," a statement from the DOF showed.

In his memorandum to Dominguez on the new regulation, DOF Undersecretary Antonette Tionko said this system is a reasonable approach “considering that the taxpayer has no control over the actual remittance of the payment to the BIR other than securing a valid confirmation receipt and ensuring that his or her tax payment is paid through a legitimate AAB of the BIR.”

Tionko, who heads the DOF’s Revenue Operations Group, said the new rule is consistent with the Memorandum of Agreement (MOA) among the BIR, Bureau of Treasury (BTr) and the AAB, whose obligation to collect, “carries with it the responsibility to remit accurately and on time such collections to the BTr.”

Under the MOA, Tionko said the AAB is responsible for holding the tax payments “in a fiduciary capacity for the account of the National Government, which should be considered as separate from the other funds in its custody.”

Tionko also said that under the MOA, the AAB shall pay penalties for late remittance, under remittance, and non-remittance of the accepted tax payments.