BIR Tax Programs

What BIR program focuses on suspending business operations on failure to comply with certain requirements?

Oplan Kandado

Who is given authority to lead the Oplan Kandado program of BIR?

The CIR or his authorized representative.

What requirements, when violated, will possibly lead to suspension of business operations?

(1) Failure to register for VAT as required.
(2) Failure to issue receipts or invoices.
(3) Failure to file VAT return and pay the tax due.
(4) Understatement of taxable sales or receipts by 30%.

What is the purpose of Oplan Kandado?

It is to enforce tax compliance through temporary business closure.

When was Oplan Kandado first initiated?

2009

How does Oplan Kandado works?

1. The BIR issues a Mission Order valid for a period of 10 to 30 days.

2. BIR may issue Apprehension Slip ON THE SPOT if the taxpayer is caught red-handed:

   1. Not issuing official receipts/invoice;

   2. Issuing unregistered official receipts/invoice.

3. Once BIR finds basis for closure, the taxpayer is sent a notice giving him opportunity to explain under oath within 48 hours.

4. If there’s no response, taxpayer will be issued a 5-Day VAT Compliance Notice and shall be given 2 days to respond.

5. If taxpayer still refuses to submit explanation, Closure Order is issued.

Explain the 5-day VAT Compliance Notice.

The 5-Day VCN contains list of requirements that the taxpayer needs to do to avoid closure.

The taxpayer must reply/respond within 2 days, after the receipt of which, the BIR will review and issue a response.

Only then will the 5-day period begin, urging the taxpayer to comply.

What if the taxpayer did not comply to a VCN within 2 days?

The BIR will then have authority to issue a closure order.

Is the closure order permanent?

NO.

The closure order is only temporary. Usually for a period of at least 5 days or until the violation is rectified.

Can partial compliance to VCN suffice for the closure order to be lifted?

YES.

In some cases, this may suffice. It also applies when there is an immediate compliance which may show taxpayers’ eagerness to comply.

How many days is a Mission Order valid for?

The Mission Order is valid for 10 to 30 days.

What may the BIR issue once it catches taxpayer red-handed?

The BIR may issue Apprehension Slip.

How many hours are given to the taxpayer to explain after being given a notice from the BIR upon its finding of a basis to close the business?

48 hours

In response to a notice by the BIR after its finding of a basis for Oplan Kandado, the taxpayer is given notice to explain “__________”.

Under oath.

In legal terms, this means that the taxpayer has made a formal, legal promise to tell the truth in a court of law or official setting.

Once taxpayer lies, he may be subject to perjury or penalties.

How many days are given to a taxpayer to comply with a VAT Compliance Notice (VCN)?

5 days.

What does RATE mean?

Run Against Tax Evaders (RATE) program of BIR.

It is program launched to investigate and prosecute those engaged in tax evasion and other criminal violations of the NIRC.

What are the grounds to be liable under RATE?

1. Failure to file tax returns.

2. Filing fraudulent return.

3. Deliberate understatement of income or overstatement of expenses.

4. Non-remittance and non-withholding of taxes.

5. Others:

   1. Use of fake eCAR, TCC, or accountable forms

   2. Failure to register with BIR

   3. Keeping MORE THAN 1 set of books of accounts

   4. Making false entries in books and records

When was the RATE program implemented?

It was implemented under the presidency of GMA, back in 2005.

Who does the RATE program work closely with?

1. RAISE Program (Revenue Assurance, Integrity, and Service Excellence)

2. Anti-Money Laundering Council (AMLC) for fund tracing

3. Task Force on Revenue Generation

4. Electronic Tax Information System (eTIS) and Internal Revenue Integrated System (IRIS) for data integration and risk profiling via Cross-Matching / Third-Party Information (TPI) Matching.

ACRONYM: RATE

What is the imprisonment term for RATE program of BIR?

2 - 6 years of imprisonment.

What is the penalty imposed for RATE program of BIR?

Up to DOUBLE the amount of tax evaded, plus surcharges and interest.

Under the RATE program, where are cases filed with?

The Department of Justice (DOJ).

What does TAMP mean?

It stands for Taxpayer Account Management Program (TAMP).

It is a program by BIR which was created to enhance voluntary tax compliance.

What was the former name of TAMP?

It was formerly called as Adopt-a-taxpayer Program.

Who are primarily the subject of TAMP?

It usually concerns top taxpayers whether individuals or non-individuals.

TAMP concerns taxpayers which accounts for at least __% of district collections.

80%

Despite not meeting other requirements, who are automatically subject to TAMP?

1. Taxpayers under the Large Taxpayer Service (LTS) of BIR.

2. Those taxpayers located on RDO No. 19 - SBMA.

What monetary threshold on sales/receipts is imposed on taxpayers to determine if they are eligible for TAMP?

If taxpayer’s annual sales or receipts EXCEEDS P12,000,000.00.

What are the consequences of being subject to TAMP?

1. Required to enroll under eFPS.

2. Required to withhold: 1% for goods; 2% for services

3. Must submit:

   1. 1604-C (Annual Information Return of Income Taxes Withheld on Compensation)¹

   2. Alphalist of Employees/Payees¹

   3. 1604-E (Annual Information Return of Creditable Income Taxes Withheld)²

   4. Alphalist of Payees²

   5. Quarterly Alphalist of Payees (QAP) - for income payors where taxes has been withheld.

   6. Summary Alphalist of Withholding Tax (SAWT) of income payments subjected to tax withheld at source

¹It is due on January 31 of the following year.

²It is due on March 1 of the following year.

When is the BIR Form No. 1604-C and Alphalist of Employees/Payees due?

Every January 31 of the following year.

When is the BIR Form No. 1604-E and Alphalist of Payees due?

Every March 1 of the following year.

What may be the bases of the monetary threshold to qualify for TAMP?

• Annual sales or receipts

• Gross purchases

• Claimed deductible itemized deductions

What does RAFT means?

It stands for Run Against Fake Transactions (RAFT).

It is a program by the BIR which aims to investigate and prosecute:
1. Buyers;
2. Sellers; and
3. Verified CPAs involved in the use of fake receipts.

Who leads the RAFT program?

It’s the office of the CIR and the RAFT taskforce.

What is the Premyo sa Resibo program?

It is a then BIR raffle program to encourage consumers to demand official sales invoice.

Prizes ranges from cash to non-cash.

How do customers participate in PSR?

Customers request invoices and send an SMS while entering details from the invoice.

What is assigned to a valid SMS entry for PSR?

An Entry Confirmation Number is given/sent to the participant.

What are the three core principles of BIR’s digitalization program?

1. Adopting a people-first approach.

2. Instituting a process perspective.

3. Embracing digital technology.

What is Pillar 1 under BIR’s digitalization program?

Strengthening the BIR organization.

What is Pillar 2 under BIR’s digitalization program?

Modernizing the digital backbone of the BIR.

What is Pillar 3 under BIR’s digitalization program?

Enhancing Policies, Governance, and Standards.

What is Pillar 4 under BIR’s digitalization program?

Elevating Taxpayer Experience and Innovating BIR services.