Tax experts urge the public to file ITRs

A group of Filipino tax experts has urged the public to faithfully comply with their tax filing obligations, saying non-compliance is now a punishable offense under existing regulations.

In a statement, the Tax Management Association of the Philippines (TMAP), said on Saturday, Feb. 12, the National Internal Revenue Code (NIRC) of 1997, as amended, compels all taxpayers, except those exempted by law, to file income tax returns (ITR).

TMAP issued the statement after a misleading excerpt of the Resolution of the Commission on Election (COMELEC) First Division on the disqualification cases against a presidential candidate circulated in various media platforms.

The controversial excerpt stated that “...the failure to file tax return is not inherently wrong in the absence of a law punishing it.”

“In line with its purpose to promote taxpayer education, the Tax Management Association of the Philippines would like to clarify that, under the current rules, the applicable provision is Section 255 of the NIRC of 1997, as amended,” TMAP noted

“Based on said provision, any person required to file tax returns but willfully fails to do so, shall, upon conviction, be punished by a fine of not less than P10,000 and imprisonment of not less than one year but not more than ten years, in addition to other penalties provided by law,” the group added.

“Thus, all taxpayers, except those exempted by law from filing tax returns such as those earning purely compensation income qualified for substituted filing, are enjoined to faithfully comply with their tax filing obligations,” TMAP said.

Last Feb. 11, Finance Secretary Carlos G. Dominguez III also issued a statement regarding the controversial COMELEC resolution.

Dominguez pointed out that failure to file tax returns is now considered a punishable offense after the 1977 Tax Code was amended in 1992.

Under Batas Pambansa 135, amending certain provisions of the 1977 NIRC, taxpayers who failed to pay their taxes on time or declare their ITRs were punished with a fine of up to P2,000 or imprisonment for a maximum of six months, or both.

However, the law also stated that individuals with compensation taxable by the code and where the tax was withheld by the government are exempted from getting such penalties. The former regulation’s exemption applies to both failure to pay tax on income and file the returns.

“This is the law applicable during the 1983 to 1985 taxable years. This provision was removed only in 1992,” Dominguez said.