As part of its “Oplan Kandado” and “Tax Compliance Verification Drive” programs, the Bureau of Internal Revenue has been regularly conducting inspections on business establishments all over the Philippines, to verify compliance with registration, invoicing and bookkeeping requirements provided for under the existing internal revenue laws, rules and regulations. This activity is also known as “Tax Mapping”
Tax mapping is usually done quarterly wherein BIR representatives will pay a surprise visit to business establishments to check if they are in compliance with the BIR rules. The penalties for non-compliance range from Php 1,000 to Php 50,000 depending on the type and extent of the violations made. In some worst scenarios, these violations can also lead to permanent closure of the business establishments, criminal charges against the owners or even imprisonment.
The BIR strictly implements these programs due to numerous cases of tax evasions among businesses, either SMEs or MNCs. To avoid paying penalties during BIR Tax Mapping, every establishment needs to do the following:
1. Register your business with the BIR.
2. 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.
3. 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).
4. Register and maintain Books of Accounts in the business premises.
5. Withhold taxes on compensation of employees, and on payments subject to final and expanded withholding tax and remit the correct tax as withheld.
6. File the necessary returns and pay the corresponding correct taxes at the time(s) required by the law.
You may want to consider engaging with a consulting firm such as Triple i Consulting which has extensive experience in dealing with the BIR. With a team of specialists in tax and accounting matters, Triple i provides accounting services, bookkeeping, government reporting and compliance for companies from the most various industries.