#AskTheTaxWhiz: What is ‘Oplan Kandado?’
Doctors in our hospital received a letter from the Bureau of Internal Revenue with a logo of “Oplan Kandado” in its letterhead, stating that our VAT compliance is low. We are being urged to amend our VAT (Value Added Tax) and Income Tax Returns (ITRs) or we would be subject to surveillance. Are we being singled out by the BIR? What is “Oplan Kandado?” Is there any threshold as basis for the VAT compliance?
No, your hospital is not being singled out. As reiterated in Revenue Memorandum Order No. 3-2009, “Oplan Kandado” is an initiative involving the strengthening of BIR’s imposition of prescribed administrative sanctions for non-compliance with such essential requirements as: the issuance of receipts, filing of returns, declaration of taxable transactions, taxpayer registration, and paying the correct amount of taxes as mandated by the norms/standards of their particular industry or line of business.
Yes, there is a threshold. The average threshold for VAT compliance is 3% of gross receipts or revenues. But this may vary depending on your industry or line of business as determined by BIR.
I have been receiving commission for the sales and marketing work I do, other than my basic salary from our company. Recently, our accounting office asked me to register with the BIR so I can issue official receipt for my additional compensation. Is that right?
No. Income other than basic salary received by employees from the same employer – including but not limited to commission, honorarium, and similar items – are all part of gross compensation income subject to withholding tax on compensation.
BIR have been filing tax evasion cases almost every week. My accountant told me we don’t need to be afraid as what we are doing is tax avoidance, and not tax evasion. What is the difference of tax evasion and tax avoidance?
Tax evasion is bad while tax avoidance is good if done correctly. Eliminating or minimizing tax liabilities are allowable. Tax avoidance, as it is technically called, is the attempt to minimize tax liabilities by lawful means.
“Tax avoidance is the tax-saving device within the means sanctioned by law. This means should be used by the taxpayer in good faith,” as explained by the Saint Paul Consulting Group (SPCG), which will be holding a Tax Avoidance Congress at the Marco Polo Plaza Hotel in Cebu on Saturday, November 15.
The congress aims to educate people on their rights, options and more importantly, the benefits of paying the correct taxes. To register, visit this site.
Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at firstname.lastname@example.org. – Rappler.com
Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals.
Mon's tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at email@example.com.