RMC 29-2021: The (e) Sign of Time
We have observed the significant transformation of the Bureau of Internal Revenue’s (BIR) tax filing and payment system to address the unexpected changes brought about by the COVID – 19 pandemic. The bureau has practically made all tax transactions done electronically, including the use of electronic signature (e-Signature) on selected BIR forms and certificates.
The BIR issued RMC 29-2021, allowing the use of e-signature on certain BIR forms as an offshoot of the Republic Act (RA) No. 11032 or the “Ease of Doing Business and Efficient Government Delivery Act of 2018″. This act aims to streamline the government’s current systems and procedures and facilitate prompt service and efficiency in all government transactions.
e-Signature vs. Digital Signature
Often, we refer to e-signature as the same concept as digital signature, but the truth is, they are two different ideas. e-Signature is an electronic symbol, process, or sound that constitutes a person’s identity and is attached to a form or certificate.
A digital signature differs from an e-signature in many aspects. A digital signature is embedded into the document, allowing users to verify if the signature was altered or copied.
The BIR’s use of e-signature is authorized under Republic Act (RA) 8792, otherwise known as the “E-commerce Act of 2000”. The law recognizes that the e-Signature on an electronic document is equivalent to the person’s signature on a written form.
Approved BIR forms with e-Signature
The BIR recognizes that there are taxpayers with several transactions, and manual preparation and signing of the forms may take time and effort. With the use of the electronic signature, completion and signing of the document is now a breeze.
Thus, taxpayers can avoid face-to-face interaction with the BIR personnel and other taxpayers, which is vital now, given the global health scare we are facing.
The new revenue circular allows taxpayers to use e-signatures on the following BIR forms:
- Form 2304 – Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation Income)
- Form 2306 – Certificate of Final Tax Withheld at Source
- Form 2307 – Certificate of Creditable Tax Withheld at Source
- Form 2316 – Certificate of Compensation Payment/Tax Withheld
Policies and Guidelines on the use of e-signature
The following are the policies and guidelines in the application of electronic signatures.
- E-signature is an option, aside from the traditional taxpayer’s signature in accomplishing the selected forms. The e-signature serves as the same as the manual signature in terms of purpose and intent;
- The use of e-signature doesn’t require BIR’s approval;
- The form with e-signature should be the current form used by BIR;
- The forms should contain an e-Signature or manual signature to be valid and binding;
- The following presumptions are observed in the use of the e-signature:
The e-Signature belongs to the person to whom it correlates.
The intention is to authenticate or approve the electronic document;
The process employed to affix or verify the e-Signature operated without error or fault;
- The person responsible for the issuance of the document shall be held criminally, civilly, and administratively liable under the provisions of the Tax Code of 1997, as amended by the Revised Penal Code and other applicable laws for misrepresentations of the information contained in the forms.
- The form with e-Signature shall only be issued once. In the case of reissuance, the reissued form should contain a ‘RE-PRINT’ watermark in Cambria font and 144 size to eliminate double take-up of tax credits.
Is this the sign of time?
We are resilient. We will survive no matter what the situation is. With or without the pandemic, we still need to eat, attend to our health needs, and of course, pay our bills, including our taxes. Being able to comply with all these household routines in a safe and fast manner is a blessing.
We appreciate the continuing system innovations and improvements in the BIR now more than ever. The need to fully automate and make use of digital technology has become more relevant following the health crisis.
With digitalization, we can conveniently pay for goods and services, receive or transfer money 24/7, avail of financial services from banks, and now file and pay our taxes.
While the BIR is still way below in automation and digitization by the world’s standard, the bureau is heading towards becoming one of the most efficient and improved government agencies in the Philippines.
How we can help you
We at DJKA Business Service Inc. offer professional advice on tax compliance for your business. Please email us at firstname.lastname@example.org for inquiries and consultations.
Read the full text of Republic Act No. 11032 here.
You may also access the RMC 29-2021 at this link.
- Guidelines and Procedures on How to Avail the 8% Income Tax Rate
- Guidelines on the Use of Electronic Audited Financial Statement (eAFS) System
- Who are Required to Withhold Taxes? (RMC 27-2022)
- Taxation of Social Media Influencers and the Tax Treaty Benefits
- VAT or Non-VAT: What Should I Choose for my Business?