Henares blows hot AIR again

THE controversial expanded Annual Income Return, or AIR, that was supposed to have been suspended is back and will be enforced in next year’s filing season.

Commissioner Kim Jacinto-Henares issued a circular sometime last month advising all Bureau of Internal Revenue officials that the more comprehensive tax forms—six pages from just one in the case of self-employed individuals, estates and trusts—will be used starting with calendar year 2011.

Strangely, the memorandum-circular no. 40 had remained missing in the BIR Web site until this weekend. Subsequent circulars numbered up to 47 dated Oct.7 were up and posted ahead on the Web.

Among the new information that the BIR wants from individuals earning purely compensation income are interests, royalties, dividends, prizes and winnings, fringe benefits, sale/exchange of real properties and shares of stocks, even though such income had already been subjected to a final withholding tax.

The AIR form also wants a listing of proceeds of life insurance policy, retirement benefits and personal and real properties received, although such receipts are already exempt from income tax.

For doctors, lawyers, artists and other self-employed professionals, the AIR form presents an even greater record-keeping and administrative challenge.

In addition to the new information asked of fixed wage-earners, the six-page form requires listing of every stock market transaction, including the number and kind of shares, certificate numbers, buying and selling prices, net capital gains, final taxes withheld and paid not only by the taxpayer but also by the spouse. –Victor Agustin, Manila Standard Today