How To Avoid Penalties During BIR Tax Mapping

Last Updated on June 11, 2020 by Marie Bautista

So, you started a business!

You’re so proud of yourself.

You started a business. It is flourishing. You are dreaming of expanding, or maybe franchising in the future.

When suddenly, the taxmen cometh…

They are not usually in black, mind you.  They are usually garbed in red or white (or some other color but these two colors are what majority of the BIR examiners wear), with a BIR logo and their office IDs.

They should also be able to show you a Mission Order issued and signed by the Regional Director authorizing specific Revenue Officers to make up the Tax Mapping Team, the area covered and the date and time of operation.

THE PURPOSE OF TAX MAPPING/TAX  COMPLIANCE VERIFICATION DRIVE

The Bureau of Internal Revenue has been regularly inspecting business establishments across the country.

It does this to verify compliance with registration, invoicing and bookkeeping requirements provided for under existing internal revenue laws, rules and regulations.

Think Again.

Tens of thousands of establishments, including really big ones, have been apprehended in this Tax Compliance Verification
Drive.

Usual violations are :

• failure of these businesses to register with the BIR,
• failure to issue duly registered receipts/invoices,
• use of unregistered receipts/invoices, and
• unauthorized cash register and point-of-sale (POS) machines.

These violations carry sanctions which include:

• confiscation of unauthorized cash register and point-of-sale (POS) machines, unregistered invoices/receipts and related business tools,
• payment of possible deficiency taxes including 25%/50% surcharge, 20% interest and compromise penalty, which ranges from P1,000.00 to P50,000.00 depending on the nature and frequency of the violation.
• Sanctions can also include imprisonment, for offenses that are subject to criminal prosecution.

Why should we pay our taxes?

In other countries, tax evasion is minimal if not absent because the citizens consider it their solemn duty to pay proper taxes for the
sake of their country.

Many of our citizens, however, have ambivalent feeling about taxes – worsened by controversies – but we still have to keep in mind that paying the correct and proper taxes would speed up our country’s growth.

Anong nakataya dito?

Your future and your children’s future.

So please, do your share…

And since a visit from the BIR Tax Mappers may bring out sanctions which can include paying penalties as high as P50,000.00 and even
imprisonment, here is a simplified list of what every establishment must do.

WHAT EVERY ESTABLISHMENT NEEDS TO DO

• Register your business with the BIR.
• Display the BIR Certificate of Registration, the Registration Fee for the Current Year and “Notice to the Public/Ask for
  Receipt” signage in the place of business.
• Issue registered invoices/receipts for sale of goods or services.  Register the Cash Register Machine, Point-of-Sale machines, or other similar devices (if any).
• Register and maintain Books of Accounts in the business premises.
• Withhold taxes on compensation of employees, and on payments subject to final and expanded withholding tax and remit the correct tax as withheld.
• File the necessary returns to pay the corresponding correct taxes at the time/s required by law.

BIR REQUIREMENTS ON HOW TO START A BUSINESS