MANILA: The Bureau of Internal Revenue has seen collections from the country’s large taxpayers to hit at least P1 trillion this year, representing nearly 60 percent of the agency’s total revenue goal of P1.704 trillion. The BIR was originally looking at a collection target of P1.07 trillion from the large taxpayers service (LTS), which consists of the country’s largest corporate clients which are mostly multinationals and publicly-listed companies.
The government’s main tax collector, however, saw a need to revise downward its LTS collection goal to P1.05 trillion after taking into account the estimated P30 billion in revenue losses from the higher tax exemption ceiling on bonuses of workers in both the public and private sector. Out of the P30 billion estimated revenue losses, about P19 billion would come from the LTS. Classified as large taxpayers by the BIR are conglomerates, their subsidiaries and affiliates, multinational companies, universal/commercial and foreign banks, and firms with an authorized capital of at least P300 million.
Also falling under this category are taxpayers with an authorized capital of at least P100 million belonging to the banking, insurance, petroleum, utilities, telecommunications, alcohol and tobacco industries. Since its creation in 1993, the LTS has steadily contributed the lion’s share of the total collection of the BIR. By expanding further the coverage of the large taxpayers to capture about 85 percent or more of the total BIR collection, it would be able to quickly raise and secure more revenue, the Philippine Institute for Development Studies (PIDS) said.
Alongside this expansion of the coverage, however, are the required LTS strengthening in systems, processes and procedures, and other reforms including the provision of attractive pay incentive packages to be able to retain high-caliber examiners, lawyers and audit personnel, the PIDS added. Among the big taxpayers that paid more than P1 billion each last year were Toyota Motors Corp., Petron Corp. Fort Bonifacio Development, Taganito Mining and Makati Development, which all belong to the BIR’s Billionaires Club. The BIR earlier launched its new tax campaign dubbed Angat Pa, Pinas!, which calls for greater participation from taxpayers in so far as paying the right taxes is concerned.
Henares said the use of third party information such as utility bills data and registration data from other agencies would help widen the tax net. For 2016, the Department of Finance has set a revenue target of P2 trillion for the BIR as the government is hard pressed to ramp up investments in infrastructure and social services to catch up with its Asian neighbors and sustain inclusive growth. Public infrastructure spending stands at less than three percent of the country’s total economic output, below Southeast Asia’s average of five percent.
