BIR willing to waive audit on taxpayers, but only if...

Delinquent taxpayers will now have an easier time qualifying for the Arroyo administration’s No Audit Program (NAP) as the government agreed to simplify the requirement to qualify for the program.

Malacañang issued Executive Order 422 on Thursday, amending the provisions of an earlier executive order that set down the parameters for the NAP.

Finance Secretary Cesar V. Purisima said President Arroyo signed the new EO yesterday to amend Executive Order 399, simplifying the requirements for qualifying to the NAP.

Under the NAP, taxpayers who have been delinquent in their returns but have not been audited by the Bureau of Internal Revenue (BIR) would be given the opportunity to settle their arrears to head off the BIR audit which could ultimately lead to tax evasion charges.

To qualify, however, the taxpayer is required to voluntarily increase their income tax payments for a taxable year by 20 to 25 percent of the taxes paid in the previous year.

According to Purisima, the hurdle has been lowered and simplified to just 20 percent to make it easier for taxpayers to comply.

"In particular, Sec. 2 of EO 399 was amended to just require at least 20-percent growth rate of income tax payment for the current tax year against the previous year," Purisima said.

According to the finance chief, the ratio of income tax payment over gross sales/receipts for the current tax year should also be at least equal of the previous year.

Finally, Purisima said the ratio of VAT or business tax actually paid to gross sales/receipts for the current year should be at least equal to that of previous year or the industry benchmark as set by BIR commissioner, whichever is higher.

The last two amendments lowered the hurdle which, under the previous EO, required taxpayers to top the numbers in the previous year.

"If you think you have filed the wrong tax return, I encourage you to avail of this program," Purisima said. "Because once you are hit by the BIR audit, that is the point of no return. We will have to prosecute."

If caught misrepresenting their income tax returns, Purisima said the BIR would prosecute cases with the full force of the law.

BIR commissioner Guillermo Parayno earlier said that instead of just paying their arrears, delinquent taxpayers would also have to face penalties and sanctions for tax evasion.