Large taxpayer focus for BIR

Posted on 07:05 PM, December 17, 2010

Large taxpayer focus for BIR

AN EVEN bigger proportion of the Bureau of Internal Revenue's (BIR) collections will be sourced from large taxpayers, new rules state.

BIR Revenue Regulations 17-2010, issued last Nov. 26 and published in a newspaper on Friday, update "the process/criteria in enlisting/delisting large taxpayers ... until such time that 85% of the bureau's total collections shall have been captured ... through the database of [Large Taxpayers Service or LTS]."

The LTS currently accounts for 60% of annual BIR collections. The regional offices account for the rest.

Tax Commissioner Kim S. Jacinto-Henares, in a phone interview on Friday, said it was "best practice" to have most of tax revenues come from a "sophisticated group which you can check and monitor more properly under one wing."

"[The regulations] make sure that you have at least 85% of revenues [guaranteed for the most part]. At least with this, the only problem you have is on how to earn the other 15%," she claimed.

Ms. Jacinto-Henares said RR 17-2010 also updates the criteria for LTS membership, which was last revised 12 years ago through RR 01-1998.

RR 17-2010 sets ten categories as large taxpayer candidates:

all branches of taxpayers under the LTS; subsidiaries and affiliates of conglomerates/group of companies initially listed as of the rules' effectivity;

the "surviving" company as a result of a merger involving a large taxpayer;

any corporation that absorbs a large taxpayer;

corporations that have at least P300 million in capital registered with the Securities and Exchange Commission;

multinational enterprises with authorized capitalization of P300 million;

publicly-listed corporations;

universal and commercial banks;

taxpayers with authorized capitalization of at least P100 million and belonging to either the banking, insurance, telecommunication, utilities, petroleum, tobacco and alcohol sectors; and

corporate taxpayers engaged in metallic mineral production.

Additional large taxpayers may be selected or deselected, the new rules state.

Criteria to be used in determining a large taxpayer, in addition to the ten categories set down, are that the taxpayer should have a net value-added tax payable of P200,000 per quarter; annual excise, income, withholding and documentary stamp taxes of at least P1 million each; percentage taxes of at least P200,000 per quarter; gross sales of at least P1 billion; net worth of at least P300 million; annual gross purchases of at least P800 million; and be among the top corporate taxpayers as listed by the Securities and Exchange Commission.

The new rules also prescribe the time, place and manner of filing/payment of taxes due.

The LTS is tasked to collect P485.15 billion of the BIR's P860.4-billion goal for the year. Data as to how much it has collected so far was not immediately available.

The BIR, which accounts for about 70% of the government's tax revenues, expects to miss this year's collection target, having taken in only P753.23 billion as of November versus its P783.03-billion goal for the period.

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