Friday, August 22, 2008 Ex-BIR official tells accountants to prepare for new tax rules
A former revenue district officer advised accounting departments of companies to start adjusting their computations based on the yet to be approved implementing rules and regulations (IRR) of the new law amending the 1987 national tax code.
Lawyer Jonathan Ca-panas, dean of University of San Jose-Recoletos (USJ-R) School of Law, said the government has no choice but to make the IRR effective “quite soon.”
Capanas is confident that the regulations will be out before the end of this month or by next month, since he is regularly in touch with his former colleagues at the Bureau of Internal Revenue (BIR).
President Arroyo signed last June Republic Act (RA) 9504, which amended Sections 22, 24, 34, 35 and 79 of the amended RA 8424, otherwise known as the National Internal Revenue Code of 1987, to help ease the impact of price increases. RA 9504 was supposed to take effect last July 6 but the BIR is still finalizing the draft IRR for the law.
Minimum wage
Among others, RA 9504 provides tax exemptions on the payments received by minimum wage earners for holiday, night differential, hazard and overtime. It also increases personal exemptions of individual taxpayers to P50,000 from P20,000 for single (unmarried), P25,000 for head of the family and from P32,000 for married persons.
“If the IRR will come out, you might have very limited time to work during the transition period. You will be doing additional work since the law will add more burden on you, as accountants and taxpayers,” he told company accountants who participated in the Midyear Tax Update at USJ-R last Tuesday.
The tax update was organized by the USJ-R School of Law and the Bar Operations Team 2008.
“Since we are uncertain when the IRR will come out, beginning this time, start asking your employees to start complying with the requirements and get the necessary forms from the BIR before they ran out of supply with the transitory period,” Capanas said.
List
He said the guidelines in the law requires accountants to come up with a separate alphabetical list of employees, classifying them as employees whose compensation income are exempt from withholding tax and not subject to income tax; employees as of Dec. 31 of the taxable year without previous employment during the year; employees as of Dec. 31 of the taxable year with previous employment within the year; and employees who received fringed benefits subjected to fringed benefit tax, among others.
Companies must also come up with an alphabetical list of employees with their respective tax identification numbers, gross compensation paid by present and previous employers for the calendar year, non-taxable holiday pay, overtime pay, night shift differential and hazard pay. The list should also include the wage of minimum wage earners.
Company accountants are also required to include in the list of employees, the amount of exemptions during the transitory period, for January to July 5, 2008 and for July 6 to Dec. 31, 2008, Capanas said. (NRC)
