DOF, BIR Improve Process for Tax Payments via Credit Cards

A new revenue regulation (RR) to be issued by the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) now makes banks, rather than the taxpayer, liable for delays in, or non-remittance of, taxes paid through credit, debit or prepaid cards.

The new RR approved by DOF Secretary Carlos Dominguez III seeks to amend RR No. 3-2016, issued by the previous administration, which made the taxpayer paying taxes via credit, debit or prepaid card still liable if the authorized agent bank (AAB) failed to remit the tax payment to the BIR on time. Dominguez’s directive will benefit primarily the self-employed taxpayers and owners of micro, small and medium enterprises who usually line up for hours at the BIR to pay their taxes.

Under the new RR that was recommended for approval by BIR Commissioner Caesar Dulay, the payment of taxes done via credit, debit or automated teller machine (ATM) and/or prepaid cards shall already be deemed paid by the taxpayer on the date and time appearing in the system-generated confirmation receipt issued by the AAB. The AAB will then be the one held liable in case of late remittance or non-remittance of such tax payments to the BIR.

According to this new RR, ‘the liability to pay the tax rests upon the AAB-Acquirer considering that from the time of issuance of a valid confirmation receipt to the taxpayer-cardholder, the AAB-Acquirer becomes the trustee of the government with the obligation to remit the payment on time to the BIR.”

In his memorandum to Dominguez on the new regulation, DOF Undersecretary Antonette Tionko said this system is a reasonable approach “considering that the taxpayer has no control over the actual remittance of the payment to the BIR other than securing a valid confirmation receipt and ensuring that his/her tax payment is paid through a legitimate AAB of the BIR.”

Tionko, who heads the DOF’s Revenue Operations Group, said the new rule is consistent with the Memorandum of Agreement (MOA) among the BIR, Bureau of Treasury (BTr) and the AAB, whose obligation to collect, “carries with it the responsibility to remit accurately and on time such collections to the BTr.”

Under the MOA, Tionko said the AAB is responsible for holding the tax payments “in a fiduciary capacity for the account of the National Government, which should be considered as separate from the other funds in its custody.” Tionko also said that under the MOA, the AAB shall pay penalties for late remittance, under remittance, and non-remittance of the accepted tax payments. (DOF)