MANILA: More than a third of the country’s largest corporations are paying only two percent in income tax every year despite high profits, a practice traced from a “control” measure in the two decades-old tax law.
A total of 518 or 35 percent of 1,477 taxpayers under the Bureau of Internal Revenue’s (BIR) Large Taxpayers Service (LTS) paid only the minimum corporate income tax (MICT) of two percent, according to the National Tax Research Center (NTRC).
This resulted into P3.3 billion taxes collected from them in 2014, the study titled “Revenue Performance of the BIR Large Taxpayers Service: 2006-2015” said. Among others, LTS includes those with annual gross sales of P1 million and net worth of at least P300 million.
“A number of (large taxpayers) despite being classified as such reported net losses caused by their declared (cost of sales) that almost eat up their entire net sales/revenues leaving almost nil gross income,” the study said.
“With a very low tax base (i.e. gross income), the computed tax is likewise low,” it added.
