BIR eases sanctions on authorized agent banks

The Bureau of Internal Revenue (BIR) has eased sanctions on accredited agent banks (AABs) violating tax collection procedures.

In a recent order, Internal Revenue Commissioner Rene Bañez said that banks could request for a waiver of penalties if they are found to be not complying with tax collection procedures.

The BIR is the only agency currently authorized to waive penalties, surcharges and interests on delayed collections.

The BIR Revenue Regulation 19-2001 specified: "Such waiver of penalties, surcharges and interest due shall in all instances be approved by the Commissioner of Internal Revenue, upon the recommendation of the Bank Accreditation Committee (BAC)."

The BIR said the BAC could recommend for a condonation of sanctions when the delay in remittance of collections as well as procedural errors committed is caused by civil disturbance or natural calamities.

The waiver for such cases will not be more than 60 percent of the total amount of penalties imposed.

The regulation also states that accredited banks with outstanding penalties due to noncompliance can request for a waiver of penalties by offering a compromise amount not less than the minimum rate provided by the new guidelines.

The minimum rate for delays in the submission of reportorial requirements for calendar year 2001 is 40 percent. For 2000 and the previous years, the minimum rate is 20 percent.

Currently, the BIR charges banks P200 for every procedural violation committed when they collect taxes from individual and corporate taxpayers.

Common offenses by banks include accepting income tax returns from taxpayers who did not present tax identification numbers and accepting tax forms from taxpayers not listed in the revenue district.

AABs are also penalized for their failure to indicate bank codes, tax types and dates of collection.

Currently, the 29 AABs of the BIR are given five days to lodge tax payments in their account with the BSP. The central bank remits the money to the Bureau of Treasury.

The BIR does not pay AABs for collecting taxes but banks gain from these transactions during the five-day holding period when the taxes are invested in the money markets to earn interest.

Including the banks’ branches, there are some 3,000 AABs all over the country.