By: Kyle Andrew P. Isaguirre
The quote, “Modern technology has become a total phenomenon for civilization, the defining force of a new social order in which efficiency is no longer an option, but a necessity imposed on all human activity” by Jacques Ellul has never been more apt for our time than it has been today.
We live in a period where the technology we’ve built completely surpasses our physical ability to accomplish a wide variety of tasks. Through technology, tasks that were meant to take hours to complete can be accomplished within minutes, if not seconds; tasks like telemarketing, proofreading, courier service, accounting and even book-keeping. In line with this, with each passing day, manual bookkeeping is steadily becoming a thing of the past, especially with CAS (Computerized Accounting System).
For tax purposes, CAS refers to the integration of an establishment’s various accounting components that allows the taxpayer to generate a computerized Books of Accounts and computer-generated accounting records and documents.
By adopting CAS, one can spot errors made in the data entries far quicker than if you were making your entries manually, thus saving you from a hefty penalty worth thousands, if not millions, of pesos. You can make an informed business decision faster by assessing your performance using a variety of financial reports you could seamlessly generate within minutes, in comparison to creating a report manually, which can take hours of tedious data inputting, computations and such.
So, whether you’re a big-time corporation or a small-to-medium enterprise (SME), there can be no denying the benefits of adopting CAS can bring to your business. Not to mention the fact that Large Taxpayers are actually required, under existing rules and regulations by the tax authorities, to adopt CAS for their business.
However, one major hindrance to adopting CAS for your business is the excruciatingly long process of applying for a Permit to Use (PTU), which is mandatory under existing tax rules and regulations. It can take years for the application to be reviewed & approved because of the CAS system demonstrations and subsequent modifications required, plus several stages of review processes involved. Using a CAS without a valid PTU can result to administrative penalties.
In a welcome development, the tax authorities recently issued Revenue Memorandum Circular (RMC) No. 10-2020, dated February 06, 2020, suspending the issuance of any PTU for CAS/Computerized Books of Accounts (CBA) and/or its Components thereof.
The RMC provides that all taxpayers with CAS applications pending before the Bureau of Internal Revenue shall be given permission to use the CAS despite the lack of a PTU, provided they submit the documents prescribed in the RMC to the Technical Working Group (TWG) Secretariat of the RDO (Revenue District Office) where they are registered.
In lieu of the PTU, an “Acknowledgement Certificate” will be issued by the TWG Secretariat within three (3) working days upon the receipt of the required documents and such Certificate shall bear a Control Number that will be reflected on the face of the Principal and/or Supplementary Receipts/Invoices. As for businesses that have used CAS, CBA and/or its Components thereof without the required PTU, they will be subjected to a post-evaluation in order to check their compliance with existing revenue issuances.
In the event that the version number and/or systems release of the CAS/CBA and its Components thereof changes as a result of any system modification or upgrade, the taxpayer should inform in writing the TWG Secretariat.
The RMC also states that a separate Revenue Memorandum Order (RMO) will be issued by the Bureau relative to the detailed procedures to implement the RMC.
RMC No. 10-2020 is indeed a positive step forward so hopefully, the tax authorities can issue the RMO as soon as possible so that taxpayers can be guided accordingly.
Kyle Andrew P. Isaguirre is an Associate from the Tax Group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice and Tier 1 transfer pricing practice by the International Tax Review.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email email@example.com or firstname.lastname@example.org.
© 2020 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.