REMINDERS AS 2012 ROLLS IN

“By the taxes he pays, a citizen has every right to demand for a good and honest government.”

– Franklin D. Roosevelt

By Ernesto C. Perez II

I wish all licensed real estate service practitioners – brokers, appraisers, consultants and government assessors – a prosperous and abundant 2012. If we are to believe the prognostications made last year, the real estate industry will continue its boom this year.

This is good for us who can expect more business to come our way this year. As we start a new year, I wish to outline some reminders that need to be performed by all licensed real estate professionals pursuant to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).

First, in Section 28, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification car, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”

Therefore, all licensed real estate service practitioners should get a PTR. It cost around P300.00 and you can get this at your City Hall. Just say that you will get a PTR at the Office of the Treasurer. The Privilege Tax Receipt mentioned in the IRR is the same as the Professional Tax Receipt mentioned in the Local Government Code.

Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of P500.00 using the BIR Form 0605. You can remit the payment at the BIR Revenue District Office (RDO) that you registered in or at the Authorized Agent Banks of the concerned RDO.

Now, if you are still not registered with the BIR then you must do so in order not to be in trouble with the Bureau as they are stepping up their efforts to collect taxes and plug the budget deficit of the country. The BIR has its eye on the professionals this 2012.

On 27 December 2011, the headline in the article in Philippine Star bannered “BIR targets 15% hike in income tax collection.” The news item said that the Bureau expects more self-employed professionals to comply with the tax rules in 2012.

Citing data from the Professional Regulation Commission, the BIR said there are some 3 million registered professionals in the country – that it includes licensed real estate service practitioners. The BIR said “the average annual income tax payments of professionals, however, average less than the monthly minimum wage of P8,500.”

As licensed real estate service practitioners, we should take this as a warning that the BIR means business. In response to this, we should make the necessary steps to be above board and follow the letter of the law, as we swore to during our oath taking as licensed professionals. Sundin natin ang matuwid na daan.

I will quickly outline below, the steps to register with BIR as a self-employed individual (professional):

STEP 1: Secure and fill up BIR Form 1901 – Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts.

STEP 2: Submit the same with the following documentary requirements to the RDO having jurisdiction over the place where you hold office – it could be a home office or a commercial office space.

Documentary Requirements:

1. Birth certificate (Original and photocopy);
2. Marriage certificate (Original and photocopy); and
3. Birth certificate of children (Original and photocopy);

Other documents for submission, if requested:

1. Mayor’s Permit (Original and photocopy);
2. Contract of Lease (if renting);
3. Title/Tax Declaration & SPA/Affidavit of Consent if the location is not owned by applicant (if not renting); and
4. Sketch of location.

STEP 3: Pay the Annual Registration Fee (P500.00) at the Authorized Agent Banks of the concerned RDO.

STEP 4: Pay Documentary Stamp Tax (DST) [loose DST / BIR Form 2000 for DST on Contract of Lease, etc.). Present proofs of payment upon submission of the documentary requirements.

STEP 5: Submit requirements for Authority to Print (ATP) and registration of books of accounts.

 Documentary Requirements:

1. Accomplished BIR Form 1906;
2. Job order from the printer;
3. Final and clear sample of receipt and invoices (machine printed);
4. Photocopy of Taxpayer Identification Number Card; and
5. Photocopy of BIR Form 0605 (payment of registration fee).

 Book of Accounts:

1. Cash Receipts;
2. Cash Disbursement;
3. Ledger;
4. Journal;
5. Subsidiary Sales Journal; and
6. Subsidiary Purchase Journal [last 2 are additional books for VAT Taxpayer].

 STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants in order to apprise them of their rights and duties/responsibilities as taxpayers.

 STEP 7: Wait for the RDO to issue the Certificate of Registration (BIR Form 2303) together with the “Ask for Receipt” notice, Authority to Print and Books of Accounts.

For a more comprehensive discussion on the steps enumerated above including the related revenue issuances promulgated by the BIR and codal references in the National Internal Revenue Code can be found in the BIR website (www.bir.gov.ph).

A final reminder to all brokers reading this article. The tax code states that “all individuals engaged in trade or business shall accomplish and file the application on or before the commencement of business operation or from the day the first (1^st) transaction occurred or within thirty (30) days from the application with the LGU for issuance of Mayor’s Permit/Professional Tax Receipt (PTR), which ever comes earlier.”

I suggest that all licensed real estate service practitioners – in particular, those brokers, appraisers, and consultants – who have not registered with the BIR to do so. In 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.” You can buy a copy of his book at his website at www.alexlacson.net.

“PAY YOUR TAXES” is the 10^th Little Thing he listed. I end by quoting some portions of what he wrote in pages 75 – 80, which resonates the same message as if it was written last year:

 “Of the many duties of a citizen under our Constitution, paying taxes is one of the most crucial. Because taxes are the lifeblood of our government, of our nation.

 “It is what we use to buy the basic textbooks for our millions of children in the country, or to build additional classrooms in public schools nationwide…

 “Taxes are what we use to buy the most basic of medicines, often generic and cheap, that our Department of Health officials distribute to 34 million Filipinos nationwide who live below the poverty line.

 “It is what we use to pay all our government employees nationwide – our soldiers, our policemen, our public school teachers, among many others.

 x     x     x

 “Viewed in this light, the taxes that you and I pay are actually not lost or wasted completely. A substantial portion of the taxes we pay is still put to good use. Because there are many public servants – not only a few or some – who still do their jobs properly. There are many of them, these honest and faithful ones, but maybe many of them are just in the rank and file, like you and me.

 “But they are there. Among the silent many who hold the center and keep our government from falling apart. They are the ones who keep our public institutions intact through storms and scandals, notwithstanding the misguided ambitions and corruption of some of their leaders.

 “It is for this reason that we should continue paying our taxes. The good ones in the government are still good reason for us to continue paying our taxes properly. The challenge for us is just how to increase the number of these good ones in government.

x     x     x

 “In 2003, P83 Billion was collected from individual income taxes. But 91% of this amount came from salaried workers from the government and private sector, people who have no choice since their income taxes are withheld mandatorily. Only P7 Billion of P83 Billion (or 9%) came from businessmen and professionals like doctors, lawyers, accountants, architects, and dentists, among others.

 “But how can this be? Guillermo de Joya, spokesman for Filipino-Chinese Chamber of Commerce & Industry, told the Senate on 12 October 2004 that there are at least 50 Billionaires and 42,500 millionaires in the country who do not pay taxes properly.

 “Can you imagine if our businessmen and professionals pay more income taxes? Or if our government is able to collect 21% this year instead of the 14.1% last year, because we all decided to pay 50% more of taxes this year? This means that our government will have more funds to perform its duties and obligations to the public.

x     x     x

“But we have to pay our taxes properly. Because we all live in the same country. Because this government, whether we like it or not, is our government. Its cost is a burden we must all share. The task of building this nation is a task that we all must share. We all must contribute to build this kind of nation we dream for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”