MANILA, Philippines - The Bureau of Internal Revenue (BIR) has again suspended implementation of a controversial memorandum circular that requires taxpayers to disclose supplemental information on other incomes when they file their income tax returns this year.
BIR Commissioner Kim Henares said the disclosure of additional detailed income information remains optional for income tax filing covering calendar year 2014, which is due on April 15.
This marked the fourth time that the BIR has deferred the implementation of the new requirement, which has drawn flak from several lawmakers and business groups.
Various sectors have objected to the supplemental information report (SIR), saying it would violate an individual’s right to privacy as well as the bank secrecy law.
They said the SIR is similar to the statement of assets, liabilities and net worth, a requirement for government officials only.
Some groups are claiming the SIR is just another fishing expedition.
The BIR, however, argued that the additional disclosure requirement is meant to help taxpayers validate their sources of income without being subjected to audit.
The supplemental disclosure gives taxpayers an opportunity to justify their ownership of assets not supported by their regular income alone.
The new requirement is also intended to help the BIR determine more easily if taxpayers are paying the right taxes.
Among the items required to be reported in the SIR are income exempt from tax and subjected to final tax such as interest on bank deposits, royalties, prize winnings, cash and property dividends, capital gains from the sale of stocks not traded on the stock exchange and real estate holdings.
The circular also requires the disclosure of items excluded from gross income such as proceeds of life insurance policy, return of premium, retirement benefits, pensions, stock transactions done through the local bourse and property received through donation and inheritance. – Louella Desiderio, Iris Gonzales