Closing my non-existent business

Ever wonder what happens to forms that we dutifully submit every month to the Bureau of Internal Revenue (BIR)? Unless you’re too prominent or too rich to ignore, they are probably tied up in bundles and kept in musty rooms, and chances are no one will ever look at them. I reached this conclusion trying to get my officially-registered but actually non-existent business out of the BIR’s computer system.  

Ten years ago, I was editing an Internet magazine for a foundation, not as an employee but as an outsourced “consultant.” Thus, I was instructed — wrongly, it turns out — by the office admin to register as a business, which required me to have a dozen books of receipts printed, buy half a dozen columnar notebooks to list down all my earnings and expenses, and file my monthly Value Added Tax (VAT) returns. The requirements were such that the office recommended I hire an accountant to attend to my finances.

But I could hardly make ends meet as it was, so I thought I’d manage it all myself.

Being a civic-minded citizen, I did everything I was told to do, initially listing down my expenses and providing receipts to the accounting section for my monthly checks, until it got old and took up too much of my time. But I met the strict monthly deadline for filing Form 2550 month after month, year after year.

Until last January, when a friend who had had to go through the same song-and-dance said that her accountant told her only those who earned P1.5 million a month are required to file BIR Forms 2550M and Q. Geez,  I don’t even make that in a year.

But I was also told that I couldn’t just stop filing Form 2550. I had first to go through a formal procedure of disengagement by providing the BIR with a letter indicating that I was “closing my business.”

That seemed easy enough. But as things would turn out, it wasn’t quite that easy.

I wrote said letter and brought it to the BIR office in my neighborhood. It was April 14, the day before the deadline for filing income taxes, but, to their credit, BIR personnel attended to my needs. I was told to fill up a form and take it to an office on the second floor, where my name and Tax Identification Number were run on a computer that spewed out my record as a taxpayer. It said I didn’t file my income tax return in 2011, and my VAT payments lacked one quarterly report in 2009. No way! But no problem, being a pack rat, I had copies of both documents at home.

When I returned a few days later, a nice lady at the counter said that besides the letter, I also needed to bring all unused receipt books and columnar notebooks, my certificate of registration, any storefront signage, and a certification of retirement from City Hall. I explained that the receipts and notebooks were lost to floods or termites, I was never given a sign, never had a storefront, and never had any dealings with City Hall. In short, I never had a business.

OK, she said, just bring an affidavit saying so. I got a notarized affidavit from City Hall’s legal office in half an hour.

With all the requirements, I went back to the BIR office, where a helpful lady examiner looked over my papers and said that I also needed to submit my income tax returns for 2011, 2012 and 2013, and all my Forms 2550M and Q for 2012 and 2013. I quickly found the files at home and stuffed them in a long brown envelope, to be submitted upon my return from a two-week trip.

This week, I was back at BIR, proudly showing the examiner everything she asked me to submit. She looked them over and said, smiling, ok, now please make three copies each of this and one copy each of that, and don’t forget to include separate sheets for copies of the receipts of payment. Then put them all in a folder with a fastener and submit them to window 4 or 5. When she sensed my near-exasperation at the additional requirements, she promised that the clerk would just receive my folder and not require anything else.

After that, she said the collection department would do the math and see whether I still had any tax liabilities. Only then would the regional office give me a certificate of no tax liabilities and finally declare my so-called business closed.

Throughout all this, I told anyone who would listen that I never had a business. I am a freelance writer and editor, and a consultant at a government office.  I have a desk and a computer at home where I meet my deadlines. But the system had recorded that I had a business, and I had to comply with every requirement to satisfy the program that put me there. Fine, but can’t the BIR prepare a fool-proof idiot’s guide to its requirements and processes and upload it on its website?

I was appalled to learn in all the years I was filing my monthly VAT payments, apparently no one at the BIR ever looked at my submissions. If they did, they would have known I didn’t even have to part with my money, whether or not I could afford it. And, in this age of severe environmental degradation and extensive computerization, why does the BIR require the submission of multiple hard copies of documents I have already submitted, wasting precious paper, not to mention valuable trees?

Should I have hired an accountant to spare myself the aggravation of having to tackle directly the inexact requirements of the BIR? Perhaps. But on the contrary, it is the BIR’s job to make its processes clearer, more user- and environment-friendly, more affordable, and more widely accessible to the public. This might win it more supporters and even increase its tax collection if it did.