THE chairman of the House of Representatives’ ways and means committee has invited Internal Revenue Commissioner Kim Jacinto-Henares to a public hearing to justify the revival of an order that requires taxpayers to provide additional detailed information on their financial position and operations which several sectors contend to be unconstitutional and perceive to be a violation of the right to privacy.              

Liberal Party Rep. Hermilando Mandanas of Batangas, committee chairman, said Henares renege on her earlier commitment to the committee to withdraw this requirement. According to Mandanas, the Revenue Regulation issued in September effectively revived Memorandum Circular 40-2011, which was issued earlier but was subsequently withdrawn due to widespread public objection.

In his letter to Henares, Mandanas said the committee has also received objections to the memorandum, among which are the Federation of the Filipino Chinese Chamber and Commerce Industry Inc., the Management Association of the Philippines, the Philippine Chamber of Commerce and Industry and the Bankers Association of the Philippines. “They assert that the new income tax forms blatantly violate their right to privacy and the bank secrecy law among others,” said Mandanas. Besides getting Henares’s side on the issue, the committee will also deliberate on the implications of this Revenue Regulations with the service agreements signed by the BIR and the Bureau of Customs with the e-connect, e-web and other service providers in line with Single Window Program.

“The review of the Management Information Service Agreements will be undertaken with due regard to the right to privacy and in line with the policy of good governance,” said Mandanas.

The additional information, according to the BIR  is designed to help the bureau monitor the proper reporting of income of every taxpayer.

In the said Memorandum Circular, the BIR released the following new forms that should be accomplished by taxpayers in filing their annual income-tax returns for 2011:

·         BIR Form 1700—for use of those earning purely compensation income

·         BIR Form 1701—for self-employed individuals and those with mixed income, and estates and trusts

·         BIR Form 1702—for corporations and partnerships

There are two new sections on taxpayer-activity profile and tax-relief availment in BIR Form 1702.

 The revised BIR Forms 1700 and 1701 now require the disclosure of additional information, such as income subjected to final tax, income exempt from tax and exclusions from gross income under Section 32(B) of the National Internal Revenue Code.

Individuals who are currently required to file BIR Forms 1700 and 1701 are required to use the new BIR forms and accomplish the supplemental information required under Part 4 of BIR Form 1700 or Part 8 of BIR Form 1701.

Under the new BIR Form 1700, not all pure compensation-income earners qualify for substituted filing. A person whose income exceeds P500,000 is now required to file an income-tax return, as well as accomplish Part 4 of the new BIR Form 1700.

Filing of the new BIR Form 1700 will also be mandatory for individual taxpayers whose sole income has been subjected to final withholding tax with aggregate final tax withheld exceeding P125,000 annually and those whose sole income is exempt from income tax and whose total annual income (exempt) exceeds P500,000.