BIR cuts processing time for tax clearances

A more efficient Bureau of Internal Revenue (BIR) awaits property buyers and stockholders after it cut the number of procedures and processing time for tax clearances and certificate authorizing registration (CAR).

Under Revenue Memorandum Circular 74-2016, the BIR said tax clearances “would be processed and released within two working days” from application, which would now only require three documentary requirements from originally nine.

CAR, meanwhile, should be issued in five from the original five to 10 working days, according to Revenue Memorandum Order 41-2016. Both issuances are effective immediately.

“Officials and employees found to have violated this directive would be subjected to the criminal and administrative penalties provided under the ARTA (Anti-Red Tape Act of 2007),” the BIR said in a statement yesterday.

Sought for comment, Eleanor Roque, head of tax division at P&A Grant Thorton tax firm, welcomed the issuances. “This is good because for us, we even have transactions pending for three months already,” she said by phone.

Tax clearances are issued to taxpayers as proof that they have paid all their dues to pursue a transaction, including transfer of properties and shares of stock. Roque said without which, CAR may not be issued.

CAR is proof that a transfer of ownership of a land or stock had actually happened, passing on the rights and responsibilities to another entity or person.

“Anything that will fast track business dealings is good news. But I guess it is also important that aside from speeding up procedures, requirements are also streamlined,” Roque said.

Under RMC 74-2016, BIR said tax clearance applicants would only need to present an application form paid with documentary stamp tax, printout of certification fee through BIR e-Filing and Payment System and delinquency verification from their revenue office or Large Taxpayers Service.

The latter, in particular, should be applied before the respective BIR office, which in turn, should give it out within 24 hours from request. The original requirement was within 30 days.

By her experience, Roque said some BIR revenue district offices ( RDOs) also require latest financial and appraisal reports, “which causes delay in the process.”

“The faster the process, the better for businesses,” she said.

The issuances mark the latest step on agencies responding to President Duterte’s order during his inauguration to accelerate and make doing business with the government easier.