HOME    geronimo@ tax Articles    Today Articles     Lectures & Presentations    News & Views     Law and Jurisprudence

Admistrative Issuance    Trust Products and Practice    About the Guru     Links    Email Feedback

‘Ayan, tinotoo nga’
Sep 18,2001
 

I do not pretend to have an influence on the thinking of our tax authorities, but, am delighted that one day after this column came out last Tuesday with a suggestion on how to address the legitimate concerns of professional entertainers, such as actors and actresses, singers and emcees, who may not be earning as much as their star colleagues, on the increase of withholding tax on their talent fees under Revenue Regulations No.6-2001, the Bureau of Internal Revenue published Revenue Regulations No. 12-2001 which embodied the substance of my proposal.

Under this amendatory regulation, talent fees will be subjected to either of two withholding tax rates: 10 percent (the rate that was imposed under regulations in force prior to Revenue Regulations No. 6-2001) for those whose gross income for the year does not exceed P720,000 and 20 percent for those whose gross income is above P720,000. In effect, the increase in rates contemplated under Revenue Regulations No. 6-2001 was made applicable only to high income earning stars and show biz celebrities

The imposition of this two-tier rate schedule thus necessitated the important component of my suggestion, namely that a process of qualification be set up to establish whether an actor, actress, singer or emcee or other professional entertainer was in fact not a high income earner. Revenue Regulations No. 12-2001 thus requires the recipient of talent fees to annually disclose in an affidavit his or her gross income for the current to the Bureau of Internal Revenue and, in order to guide those who pay the fees on what rate to impose, furnish all their current payors with a copy of that affidavit. To make sure that the affidavit is the same one submitted to the Bureau of Internal Revenue, the affidavit must be stamped received by the Withholding Tax Division of the national office of the bureau.

The disclosure must be filed with the bureau on June 30 every year or within 15 days of the following month when the talent’s income reaches P720,000, whichever date comes earlier. If the total gross income of a talent as of June 30 does not reach P720,000, the talent is required to file a second disclosure within 15 days after the end of the month that his or her gross income for the current year reaches P720,000.

The first disclosure under Revenue Regulations No. 12-2001 must be filed on or before September 30 of this year.

If a talent does not make the annual declaration required by the regulations, the payors of the talent fees are required to withhold at 20 percent.

I would not be surprised if the show-biz personalities once again troop to the office of the BIR commissioner or, for a more titillating meeting, to the office of the Finance Secretary in further protest. In the first place, why should the declaration be a sworn statement? Ano ba ’yan, you mean we will lie about our income? Why not just require them to sign on a piece of paper and submit, tapos?

Secondly, the obligation to make a disclosure is not only on those who are not earning more than P720,000. It applies to every professional entertainer, director involved in movies, stage, radio, television and musical productions and other recipients of talent fees. Why not simply require the disclosure on those who wish to keep their withholding tax rate at the present 10 percent? Those who do not mind subjecting themselves to the 20 percent (regardless of whether they earn more or less than P720,000) need not be bothered with the obligation of sending their disclosures to the BIR.

Thirdly, the talents must provide copies of their declaration to all their current payors. Which means that the producers will know, in a general sense, how much a talent is making. Aba, ano ang pakialam nila sa kita ko?

Finally, why should everyone go to the National Office? Ang layo layo naman! Spread the cheer, National Office boys, let’s devolve that to the RDO’s. Many of them, I was told, are on a first name basis with the stars, anyway.

So, if I may suggest again, Lito and Rene, give yourselves a break. Require the disclosures only on those who want their withholding to remain at 10 percent. Forget about the rest. You have better things to do with your time than attend to those who, for all you know, welcome the status symbol of being taxed at 20 percent.

HOME    geronimo@ tax Articles    Today Articles     Lectures & Presentations    News & Views     Law and Jurisprudence

Admistrative Issuance    Trust Products and Practice    About the Guru     Links    Email Feedback