Erroneous BIR Form No. 1701 and 1702 by patreon.com/EmelinoTMaestro

I am not a FAN of incompetence and negligence.

The Philippine Supreme Court, in relation to Article 213, Revised Penal Code, says that to assess and collect a tax larger than what the law dictates is a criminal act punishable by law.

This is true and correct if the above BIR Official would not act on the injustice that the BIR Forms bring.

The revised BIR Form Nos. 1702-RT, 1702-MX and 1702-EX warned the users thereof, “IF THERE APPEARS TO BE ANY DISCREPANCIES BETWEEN THESE INSTRUCTIONS AND THE APPLICABLE LAWS AND REGULATIONS, THE LAWS AND REGULATIONS TAKE PRECEDENCE.”

It’s my belief and conviction that the use of their Schedule 2 which pertained to ‘Cost of Sales’ would unjustly increase the collection of Minimum Corporate Income Tax for it is inconsistent with the provisions of Section 27(E)(4), National Internal Revenue Code, as amended (NIRC).

The Schedule 2A thereof shows the ensuing, viz;

Cost of Sales (For Those Engage in Trading)

Merchandise Inventory, Beginning

Add: Purchases of Merchandise

Total Goods Available for Sale

Less: Merchandise Inventory, Ending

Cost of Sales

Accordingly, the 2nd paragraph of Section 27(E)(4), NIRC says that the ‘Cost of Sales’ shall consist of the following;

Invoice amount of the goods sold

Import duties

Freight-in/out

In-transit insurance

Therefrom, the Cost of Sales that must be presented in the said BIR Forms should be as follows, viz;

Merchandise Inventory, Beginning

Add: Purchases of Merchandise

Total Goods Available for Sale

Less: Merchandise Inventory, Ending

Invoice Amount of the Goods Sold

Add: Import duties

Add: Freight-in/out

Add: In-transit insurance

Cost of Sales

I wrote this so that all the users of the said BIR Forms may avoid the potential tax troubles that may happen in the nearest future.

I also request the Discipline Office of the Office of the President, PACPO of Office of the Ombudsman and the Office of the Secretary of Finance to look into this possible ‘mess’

RA 9485 requires this Office to take an action within five (5) days from receipt hereof. Thanks a lot for your immediate reply.

Unit 419 Corporate 101, Mother Ignacia, Quezon City

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