The Revenue Memorandum Circular No.

19-2018 dated 19 March 2018 is issued to clarify the

basis for the computation of Capital Gains Tax (CGT) and Documentary Stamp Taxes (DST) in
sales transactions of previously mortgaged real property. As stated in Section 6(e) of the Tax Commented [NRE1]:
Code, the fair market value would be higher of the zonal value as set by the BIR and published
in department orders or the fair market value as shown in the schedule of the provincial or city
assessors. Revenue district officers cannot drift off from the provisions of the law and consider
the mortgage value of the property.
Provisions listed in Revenue Memorandum Circular No. 21-2018 dated 02 April 2018 further
implements rules listed in Revenue Memorandum Circular No. 16-2018 dated 15 March 2018
which focuses on the imposition of surcharge, interest and compromise penalties in an amended
tax return. The BIR noted that there are Revenue District Officers that impose 25% surcharge on
amended returns while some do not impose such surcharge. This inconsistencies caused
confusions in taxpayers. As a result, the BIR ruled that amendments to returns involving additional
tax payments shall be subject to the 25% surcharge in addition to the 20% interest and compromise
penalties. RMC No. 21-2018 is anchored on Section 248 of the National Internal Revenue
Code(NIRC) which imposes civil penalties. According to the BIR, it is clear that the interest of
20% and penalty equivalent to 25% of the amount due shall be imposed in case of failure to file
any return and pay the tax due thereon on the date prescribed; or failure to pay the full or part of
the amount of tax shown on any return as required under the provisions of the NIRC or rules and
regulations. Given the strict imposition of the 25% surcharge by BIR, the taxpayer should be
careful in preparing his tax returns and make sure that amounts reported in the tax returns are
accurate. Otherwise, they would need to pay the unnecessary cost of 25% surcharge. Any mistake
in the tax return would be costly so this would require taxpayers to be careful and prudent in
preparing their tax returns.
The Bureau of Internal Revenue has issued Revenue Memorandum Circular No. 24-2018 dated
10 April 2018 to prescribe the guidelines in the filing, receiving, and processing of 2017 income
tax returns and their attachments. This RMC also clarified the previously issued advisories
regarding the guidelines in the filing, receiving and processing of the income tax return.
Revenue Memorandum Circular No. 26-2018 prescribes the revised BIR Form No. 2551Q
(Quarterly Percentage Tax Return) in line with the implementation of the Tax Reform for
Acceleration and Inclusion (TRAIN) Law. Under the TRAIN Law, there will be no more monthly
filing of percentage taxes. Instead, it will be a quarterly filing of percentage tax. However, the tax
advisory released by the BIR specifically mentioned only those taxpayers subject to percentage
tax pursuant to Section 116 of the Tax Code (VAT-exempt taxpayers with annual revenues not
exceeding P3,000,000) and those who will be subject thereto due to change of registration from
VAT to Non-VAT. The revised quarterly filing is not clear to other percentage tax payers such as
banks, who were also filing their percentage tax on a monthly basis prior to the new law. It is not
mentioned if they should follow the guidelines set forth in the tax advisory or should they stick to
the old manner of filing their percentage tax returns. Although there were issuances in the
amendment in the frequency of filing of filing tax returns introduced in the new law, other
provisions of the law remain unclear and lack sufficient guidance.
Revenue Memorandum Circular No. 27-2018 dated 16 April 2018 prescribes the revised BIR
Forms affected by the TRAIN Law. This forms include BIR Form No. 1601-EQ, 1601-FQ, 1602Q,
1603Q and 1601-C. Aside from the changes in the frequency, processes, formula and tax table, the
TRAIN Law also have changes in the BIR Forms. Although it may seem confusing, effective tax
planning strategies can be timely implemented to aid taxpayers in navigating the tax changes
within the precepts of the law.
The Bureau of Internal Revenue has issued Revenue Memorandum Circular (RMC) No. 28-2018
dated 27 April 2018 to advise taxpayers to pay only the basic tax due and disregard the penalties
erroneously computed by the Electronic Filing and Payment System (eFPS) in connection with
the filing of Bureau of Internal Revenue (BIR) Form No. 1602 (Monthly Remittance Return of
Final Income Taxes Withheld on Interest Paid on Deposits and Yield on Deposit
Substitutes/Trusts/Etc.) and BIR Form No. 1603 (Quarterly Remittance Return of Final Income
Taxes Withheld on Fringe Benefits Paid to Employees Other than Rank and File), provided that
the payment related to these BIR Forms was made on or before the updated deadline as provided
below. As the deadline of the said BIR forms is still being updated, it caused to have erroneous
computations for penalties. Any filing and/or payment beyond the deadline shall be subject to the
applicable penalties imposed/computed by the eFPS from the updated due date until actually paid.

Undoubtedly, the transition period to fully implement the changes brought by the TRAIN Law still
have a long way to go. A less complicated and more taxpayer-friendly administration of taxes is
still expected by many. It would be a challenge to the present administration to increase the level
of tax consciousness of the people. Thus, the BIR should further release revenue issuances that
would comprehensively address the concerns and clarifications of taxpayers.