New BIR reporting requirement hit

By Gil Cabacungan

Philippine Daily Inquirer

Deputy Majority Leader and Valenzuela City
 Rep. Magtanggol Gunigundo has scored  the BIR
 for practically abolishing the Bank Secrecy Act
 through Memorandum Circular 9-2014 issued on
 Feb. 11, 2014, which requires corporate and
 individual taxpayers to declare the income earned
 on their bank deposits and other investments in
 their tax returns. congress.gov.ph/

MANILA, Philippines—Congress and several business groups have described as an attack on an individual’s constitutional right to privacy the unilateral move by the Bureau of Internal Revenue (BIR) requiring taxpayers to reveal more details about their bank deposits in their income tax returns beginning this year.

During a hearing of the House committee on ways and means, Deputy Majority Leader and Valenzuela City Rep. Magtanggol Gunigundo scored the BIR, which was represented by Deputy Commissioner Nelson Aspe, for practically abolishing the Bank Secrecy Act through Memorandum Circular 9-2014 issued on Feb. 11 which requires corporate and individual taxpayers to declare the income earned on their bank deposits and other investments in their tax returns.

Several resource persons in the hearing said that under MC 9-2014, the filing of supplemental information on income (such as gifts, prizes, royalties and fringe benefits) and assets (real estate, bank deposits and shares of stock) would become mandatory for fixed-income and self-employed individuals starting next year, under the new 1700 and 1701 income tax return forms. Such information remains voluntary this year.

Corporate taxpayers, meanwhile, have to give more detailed information on their taxes starting this year using the 1702 forms.

Gunigundo said that far from being “harmless and innocuous” as described by Aspe, the new BIR forms directly attack the right to privacy guaranteed under the Constitution.

The Valenzuela representative said that Revenue Regulation 2-2014 signed by Finance Secretary Cesar Purisima on Jan. 24 merely ordered the use of the new income tax forms this year, while the  memo signed by BIR Commissioner Kim Henares “interpreted” the new guidelines to the extreme.

Several business organizations, among them the Tax Management Association of the Philippines, Bankers Association of the Philippines, Philippine Institute of Certified Public Accountants and the Philippine Life Insurance Association Inc., echoed the concerns raised by Gunigundo and other lawmakers at the hearing.

Read more: http://newsinfo.inquirer.net/578754/new-bir-reporting-requirement-hit