BIR reduces interest rate on tax deficiency

Published September 17, 2018, 4:48 PM

by Patrick Garcia

By Jun Ramirez

The Bureau of Internal Revenue (BIR) has issued regulations simplifying and reducing the interest rate on delinquent accounts from 20 to 12 percent per annum as prescribed by the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

BIR logo and building (Manila Bulletin file photo)
BIR
(Manila Bulletin File Photo)

But Revenue Regulations (RR)No.42-2018 stated that the old and higher 20 percent rate will still be applied on deficiency taxes incurred prior to the effectivity of the TRAIN Law on Jan. 1, 2018.

The 12 percent interest doubled the legal interest rate of six percent prescribed by the Bangko Sentral ng Pilipinas (BSP) on loans.

Revenue Deputy Commissioner for Operations Arnel SD Guballa said the TRAIN Law’s low interest schedule has eliminated the old punitive interest rate that encourages delinquency in paying correct taxes.

Guballa said the current interest rate is no longer oppressive as it only doubles the legal interest rate for loans set by the BSP.

In the past, taxpayers would opt to pay the interest penalty, which is more than the deficiency tax due as they are simultaneously imposed.

The simultaneous imposition is not allowed under the TRAIN Law, thus reducing the total tax liabilities.

The regulations were signed by Finance Secretary Carlos G. Dominguez based on the recommendation of BIR Commissioner Caesar R. Dulay.

 
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["news"]
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BIR reduces interest rate on tax deficiency

Published September 17, 2018, 11:38 AM

by manilabulletin_admin

By Jun Ramirez

The Bureau of Internal Revenue (BIR) has issued regulations simplifying and reducing the interest rate on delinquent accounts from 20 to 12 percent per annum as prescribed by the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

BIR logo and building (Manila Bulletin file photo)
BIR
(Manila Bulletin File Photo)

But Revenue Regulations (RR)No.42-2018 stated that the old and higher 20 percent rate will still be applied on deficiency taxes incurred prior to the effectivity of the TRAIN Law on Jan. 1, 2018.

The 12 percent interest doubled the legal interest rate of six percent prescribed by the Bangko Sentral ng Pilipinas (BSP) on loans.

Revenue Deputy Commissioner for Operations Arnel SD Guballa said the TRAIN Law’s low interest schedule has eliminated the old punitive interest rate that encourages delinquency in paying correct taxes.

Guballa said the current interest rate is no longer oppressive as it only doubles the legal interest rate for loans set by the BSP.

In the past, taxpayers would opt to pay the interest penalty, which is more than the deficiency tax due as they are simultaneously imposed.

The simultaneous imposition is not allowed under the TRAIN Law, thus reducing the total tax liabilities.

The regulations were signed by Finance Secretary Carlos G. Dominguez based on the recommendation of BIR Commissioner Caesar R. Dulay.

 
CLICK HERE TO SIGN-UP
 

YOU MAY ALSO LIKE

["news"]
[2377553,2814292,2534630,2485825,2408462,2358243,2358052,2344118,2339143,2047660,1998697,996820,995332,995948,995006,994327,994303,993947,993860,993770,993529,993383,993285,798318,2875930,2875920,2875908,2875911,2875898,2875893]