8 Ways to Learn BIR Tax Compliance

By: Garry S. Pagaspas

As the saying goes:

“The only things certain in life are death and taxes” – Benjamin Franklin

“There is nothing permanent except change” – Heraclitus of Ephesus

In my years of tax practice, I have come to embrace the above sayings describing the need to learn taxation as applied to business, and the need for a continuing knowledge to fuel business success. Obviously, knowledge of how taxes apply would be a very big advantage and lack of it would be too risky as resources are at stake to be wasted on penalties. I think, you would not like it when your hard earned money will just be wasted on government coffers through penalties or worst, on private pockets, and you cannot justify non-compliance with a simple ignorance. As our laws puts it:

“Ignorance of the law excuses no one from compliance therewith” (Article 3, New Civil Code of the Philippines)

As a guide on how to achieve the required knowledge on tax compliance required by the tax authorities – e.g. the Bureau of Internal Revenue (BIR), let us take up the following ways and check out for yourself the most applicable practical way.

  •  Earn an accounting degree (Bachelor of Science in Accountancy or BSA)

Part of the accounting degree curriculum are three (3) tax subjects – Income taxation, Transfer and Business Taxation, and Taxation Review so after passing the subjects, you will be knowledgeable in tax applications. Should you decide to become a Certified Public Accountant (CPA) and be one of us, you may have to undergo a CPA review course for around six (6) months where you will be exposed to different tax concepts and applications to enhance your knowledge. Notably, BSA degree is now a five-year course in most universities, and tuition fees are towering. With a BSA degree or a CPA title, you will notice the material advantage when you proceed with your law degree (College of Law or LLB) because same tax subjects will be taken up, though, in a more technical manner.

  • Read tax text books and references

Various references are out on the market now and you could easily get taxation textbooks in bookstores nationwide. Depending on your feel of a textbook, you could choose from a paper bound to hard bound, from a made easy write-up to a more technical write-up, or from a BSA textbook or a law textbook. What I miss on the textbooks is one that is focused on basic business taxation because most textbooks in the market now are academic textbooks – either for college commerce students, or for law students. Cost wise, textbooks and references may not cost you that much. BSA textbook ranges from P300 to P600 a copy, while a law textbook may range from P500 to P1,500. Last piece of note, always be mindful of the textbook edition because tax rules are constantly changing and you might be reading an old textbook with old rules.

I am inclined to write one for SMEs, a basic taxation guide, but time is much of a constraint. With my involvement in the academe, I would feel that this would make my life more easier, and at the same time, this may become a ready reference for my seminar participants. Hopefully, I will finish one in the near future. Online taxation textbooks nowadays, are not yet popular but I have seen some few attempt like in TaxBukPinoy.Com – Online Pinoy Taxation Textbook For Everyone. This would also be good to enrich online resources and bring tax lessons nearer to entrepreneurs and students who consume most of the time online. The online concept is similar to that of an Engineer friend in his Mathlino.Com for engineering field.

  • Attend short-term tax courses – seminars, trainings, workshops

Presently, more seminar and training entities – profit and non-for profit oriented are coming into existence.Trainings, workshops, and seminars ranges from the basic business taxation programs to specialized programs in income taxation, business taxation, and other tax compliance requirements. Required investment ranges from P2,500 to P5,000 a day for those catering SMEs using their own seminar venues, and P5,000 to P15,000 a day for those using Five Star hotels as venue. For me, much concern and emphasis should be placed on the learning so I would suggest you get the details or outline of the program before enrollment.

Tax and Accounting Center, Inc. (TACI) is one of them who advocates on educating the taxpayers – e.g. small and medium entrepreneurs (SMEs) about the tax implications of their business transactions, the proper tax compliance that they ought to know, the tax saving opportunities that may enjoy, and the continuing tax knowledge they must possess for better business advantage. If you would wish to view TACI programs, please click this link – Quality Seminars, Trainings, and Workshops.

  • Hire private tax tutors

Tutorial does not sound new to us also. If I remember it right, even our very own national hero, Dr. Jose P. Rizal, had secured some tutorials during his studies. I subscribe on the tag line – “heroes are not born, they are made“. Under this, the learning is at its peak because the approach is more personalized and you can control the speed of the discussions to catch up with the tutor. Questions can always be raised all throughout the discussions, and venue could be at your own place and convenience. Tutorial fees also varies depending on the technicalities of the topic, and the qualifications of the tutor. I would estimate the range to start from P300 per hour to P1,000 per hour.

  • Hire a tax consultant

Tax consultants are those who possess the technical knowledge in the application of the tax laws, rules, and regulations. For those who would represent with the BIR in behalf of the taxpayers and those Certified Public Accountants (CPAs) who would sign on the audited financial statements of taxpayers, they are required to be BIR accredited tax agents. Consultants are normally called in to render opinions, consultancies, and technical tax matters to guide taxpayers in the application of the tax rules and avoid unnecessary penalties.

Professional fees of tax consultants also varies. Some charges based on time charges, while some are output based, and some arrangements are on retainership for a continuing tax consultancy. Under this retainership, taxpayer client could ask as many questions and clarifications as it could so it will fully understand the tax rules. Tax updates applicable to taxpayer client is normally provided.

So much for the ways requiring much investment, and let us proceed with the FREE ways to learn tax compliance, or at least minimal cost using the online world. We are now in the world where almost any information you need could be sourced online.

  • Join and interact on tax forums

Online tax forums could provide you tax information on how tax compliance. These forum sites normally require a pre-registration before you could interact with the group and in most cases, topics covered in one forum may not be necessarily limited to tax compliance. Other topics could be about entrepreneurship, business issues, and up to anything under the sun. Examples of this would be the Business Forum Philippines of a co-CPA friend. You just register, read the forum rules, and interact all the way for free and without any charge.

  • Ask questions for free

Some websites are likewise designed to become a purely question and answer one. TACI for example is maintaining a website of this import in furtherance of its advocacy to assist SMEs in their knowledge in tax compliance. A simple registration is required using your valid e-mail address and once registered, you could freely post any question about tax compliance or if you have the capacity and a heart, you may help others in their questions. Site administrator visits the site once in a while see open questions and share views. Again, the same is free of charge and you could visit the same anytime – TaxAcctgCenter Forum – In every question, comes great answers.

  • Visit tax informative sites

For continues learning, you will see online numerous websites writing about recent tax issuances of the BIR and other related government agencies. Some are websites of broadsheets, law firms, accounting firms, business bloggers, and other service providers. They are just a mouse click away from your computer.

TACI has likewise provided a page for the purpose of sharing with the taxpayers, the recent tax developments and views on certain tax issues. The author is himself a contributor and you can visit the page anytime – Tax and Accounting Updates. If you have questions, clarifications and comments on the articles, you could freely fill-out the comment form for the purpose. It will not appear outright as the admin will approve it first. Another notable entreprenuerial site with helpful tax articles is the Business Tips Philippines owned by a co-CPA friend.

 

Summary

I hope the above ways would help open-up alternative for a better tax compliant taxpayer. Some would involve costs but for me, I would rather “spend to learn than spend to waste”, such as when penalties are imposed and hard earned money are wasted on them. If you do not comply and evade taxes, its just like you owed the government in a manner that when the government collects, the interest and penalties are very much more than the amount owed. Worst, you pay using your liberty and freedom as tax evasion carries an imprisonment after the criminal due process. Finally, tax compliance is like buying a peace of mind. You comply, and worry not so you have peace of mind. You do not comply and prepare your self for the headache it will bring in the future.


(Garry S. Pagaspas is a Resource Speaker with Tax and Accounting Center, Inc. He is a Certified Public Accountant and a degree holder in Bachelor of Laws engaged in active tax practice for more than seven (7) years now and a professor of taxation for more than four (4) years now. He had assisted various taxpayers in ensuring tax compliance and tax management resulting to tax savings rendering tax studies, opinions, consultancies and other related services. For comments, you may please send mail at garry.pagaspas@taxacctgcenter.org.)

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances.


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