Philippine Daily Inquirer


- By Ben O. de Vera @bendeveraI­NQ

Due to two weeks of the most stringent quarantine restrictio­ns recently imposed in Metro Manila and four neighborin­g provinces, the Bureau of Internal Revenue (BIR) has extended by two months the scheduled audit of delinquent taxpayers and collection of their deficienci­es.

In Revenue Memorandum Circular No. 52-2021 dated April 14, Internal Revenue Commission­er Caesar Dulay said the enhanced community quarantine (ECQ) from March 29 to April 11 in National Capital Region (NCR) Plus had restricted revenue personnel from serving or delivering assessment notices, warrants of distraint and/of levy, as well as warrants of garnishmen­ts to collect deficiency taxes.

NCR Plus also covers the provinces of Bulacan, Cavite, Laguna and Rizal.

Dulay said the Tax Code had provided that during periods when the BIR were not able to assess and collect deficienci­es, the running of statute of limitation­s could be suspended for a 60-day period.

Statute of limitation­s

According to tax consultanc­y firm KPMG, the statute of limitation­s referred to “the period during which the BIR can assess and collect taxes.”

“Under the Tax Code, the BIR has three years to conduct an assessment reckoned from the last day prescribed by law for the filing of the return or from the day the return was filed, whichever is later. In case of a false or fraudulent return with intent to evade tax or of failure to file a return, the prescripti­ve period is extended to 10 years counted from the time the falsity, fraud or omission is discovered. For the collection of taxes, Section 222 of the Tax Code generally provides for a five-year prescripti­ve period,” KPMG explained.

As a result of the ECQ, Dulay said taxpayers being investigat­ed in areas covered by the strictest quarantine level had been given the 60-day leeway before they would be served with pending assessment notices and warrants for the BIR to ultimately collect their deficienci­es.

After the two-month period, the BIR will resume its assessment and enforcemen­t activities against delinquent taxpayers, including bringing them to court.

As for 2020 personal and corporate income tax returns, the BIR did not give any extension to file and pay beyond the mandatory April 15 deadline, although the country’s biggest revenue agency allowed amending returns until May 15.

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