BACC 2 INCOME TAXATION
Lopez, CPA
Tax Administration
(Chapter 2)
Tax Administration
Tax Administration is a system of collecting taxes in
accordance with the country’s tax policies. It involves
enforcement of taxes through the following aspects of
taxation:Assessment and Collection
Tax Administrative Agencies
Department of Finance (DOF)is principally responsible for
the fiscal policies and general management of the
government’s financial resources. It has executive supervision
and control over other agencies such as:
1. Bureau of Internal Revenue (BIR) is the government
agency primarily in charge to assess and collect all taxes
and charges imposed by NIRC.
2. Bureau of Customs (BC) and Tariff Commission (TC)
are the main agencies tasked to enforce the Tariff and
Customs Code (TCC). The BC also collects the taxes on
imports embodied in the NIRC.
3. Land Transportation Office (LTO) is the office
responsible to collect registration fees and motor vehicle.
4. Duly and Lawfully Authorized Collectors are the
persons, agencies or duly accredited banks authorized by
the BIR, BC, TC and LTO to collect taxes.
5. Local Offices in charge to Enforce Local Taxation:
a. Provincial City, Municipal and Brgy. Treasurers.
b. Provincial and City Assessors
c. Provincial and City Board of Assessment Appeals
d. Central Board of Assessment Appeals
The Bureau of Internal Revenue
List of BIR Officers:
1. Commissioner
2. Deputy Commissioners
3. Revenue Regional Director
4. Revenue District Officer
5. Revenue Examiners and Officers
6. Division Chiefs of the BIR
7. BIR Collection Agents
Annual Registration Fee is P500 for every business and
shall be paid upon registration and every year thereafter on or
before the last day of January. Cooperatives and individuals
earning purely compensation income and overseas contract
workers are not liable to the registration fee herein imposed.
BIR Forms
1. BIR Form 1901 – registration for self-employed, mixed
income individuals, estates and trusts.
2. BIR Form 1902 – for individuals earning purely
compensation income.
3. BIR Form 1903 – for registration of corporation and
partnerships.
4. BIR Form 1904 – for registration of one-time taxpayer
and person registering under E.O No. 98 (securing TIN to
transact with any government agencies.
5. BIR Form 1905 – for updating/cancellation of registration,
cancellation of TIN, new copy of certificate of registration.
6. BIR Form 1906 – for printing receipts and invoice
(Authority to Print)
Franklin D.
Sales or Commercial Invoice is a document issued by
the seller of goods to the buyer.
Receipt is a document issued for sale of services.
The printed receipts or sales invoice should be:
 Be serially numbered
 Contain the name, business style, TIN and
business address.
Rules on Issuance of Receipts or Invoice
 The time of issuance should be at the time when
transaction is effected.
 All persons subject to any internal revenue tax are
required to issue receipts or sales invoice when the
value of merchandise is twenty-five pesos or more.
 Receipt must be issued regardless of the amount
when it covers payment of rentals, commissions,
compensations or fees. And a VAT registered person
makes a sale to another VAT registered person.
 Receipts should indicate the name, business,
address of the purchaser when it covers payment of
rentals, commissions, compensations or fees. And a
VAT registered person makes a sale to another VAT
registered person.
 The original receipt shall be issued to the purchaser
and the issuer shall keep the duplicate in the place of
business for five years.
7. BIR Form 605 – for annual registration fee.
Tax Returns
Tax return refers to a formal report, prepared by a taxpayer or
his agent in a prescribed form showing in an enumeration of
taxable amounts and description of transactions, allowable
deductions, amount of tax and tax payable to the government.
1. BIR Form Nos. 1700 - Annual Income Tax Returns for
Individual earning purely compensation income
2. BIR Form No.1701 – Annual Income Tax Returns for
Self-employed and mixed income individual
3. BIR Form No.1702 - Annual Income Tax Returns for
Corporation and Partnership.
4. BIR Form No.1800 – Donor’s Tax Return
5. BIR Form No.1801 – Estate Tax Return
Due Dates of Filing and Payment of Tax
Income Taxes Due Dates
Compensation of Individual May 15 succeeding year
Business/Profession
1Q – (Jan – Mar.) May 15
2Q – (Apr. – Jun.) Aug. 15
3Q – (Jul. – Sept) Nov. 15
4Q – (Oct. – Dec.) May 15 succeeding year
REF: ‘INCOME TAXATION’ by G. Valencia and F.
Roxas
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