BIR cracks down on jewelry sellers

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The Bureau of Internal Revenue has issued new rules meant to deter the untaxed selling of gold that are usually carried out through hotels, with the buyers inviting sellers through newspaper advertisements.

Revenue Regulation No. 5-2013 requires the advance payment of probable taxes due on the sales of jewelry, gold and other precious metals, particularly to foreign buyers.

In a statement, the BIR observed that after it issued rules last year (RR 6-2012) that imposed excise, value-added and income taxes on the sale of gold and other metallic minerals to the Bangko Sentral ng Pilipinas (BSP) as well as to other buyers, many sellers chose to sell their gold to non-BSP buyers that did not impose the taxes.

Such selling, which the BIR said were taking place in gatherings and expositions hosted at hotels and other venues, “are tantamount to tax evasion.”

The agency did not mention particular parties involved. But a company called Field Rich Corp., which describes itself as “America’s most trusted gold buyers,” has been running full-page ads in newspapers circulated nationwide in the past few days.

The ads invite owners of gold scrap, unwanted jewelry made of gold, gold coins and even gold bars. Field Rich also wants to buy sterling silver—dining implements or old American coins.

Sellers are invited to five consecutive days— which run until Saturday—of buying events in hotels like the Eastwood Richmonde in Quezon City, Edsa Shangri-La in Mandaluyong City, New World in Makati City and The Bellevue in Muntinlupa City.

Earlier this month, the Inquirer ran a story about a similar company, H&J Jewellers. The report quoted BSP assistant governor Vicente Aquino as saying that H&J was not committing any illegal activity per se in buying gold.

But Aquino noted a law, Republic Act No. 7076 or the People’s Small-Scale Mining Act of 1991, which mandates small-scale gold miners to sell the gold they produce only to the BSP.

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  • tilamsik

    Want to collect more? Make sure your collectors dont get their “personal collections”. Its a fact the BIR people “negotiate” with big taxpayers of course for a negotiated lagay. If that is still not known to them? Check your own people and everything else will take a smoother course.

  • gryzyxwoz

    Kim Henares and the BIR appear to be totally oblivious to the reality of market forces. Their job is to increase tax collection, but they’re achieving the opposite here with their excessive tax rate on gold transactions. They also can’t seem to understand why that trying to bludgeon people into compliance is not exactly the most effective way to enforce revenue regulations. Once again, I expect our poor Ph to get the short end of the stick, as these traders will be forced to go underground.

    • Cano Manuel

      Then what do you suggest?

      • gryzyxwoz

        1. They need to sharpen their P.R. skills. As the old saying goes, you can attract more flies with honey than vinegar. 2. They were already warned about the tax on gold transactions being excessive, but they stood their ground. Result? Check out how gold transactions with the central bank have nosedived. And I almost forgot: They pulled the same stunt a few months ago when they used scare tactics to intimidate a lot of young people who are (were) engaged in home-based online businesses. Their tactics of intimidation, I am quite sure, will make a lot of these young people stay underground. There’s a lot of tax revenue that can be brought in by this young and burgeoning industry…. but they started off on the wrong foot. They should be making it easy for people to register formally, and become nation-building taxpayers.

      • Cano Manuel

        Those are not flies. Those are crocodiles. You can’t have crocs for pet.

        Law is law. Anyone convicted must be punished.

      • Handiong

        Gold, especially those coming from mines, should be taxed heavily. Gold is a natural resource that belongs to the people and the people should benefit from it by way of taxes. And anybody who tries to evade the taxes must be prosecuted to the full extent of the law.

        Our poor people will get the short end of the stick only if the gold traders will get away from paying taxes.

      • gryzyxwoz

        I agree with you that citizens should pay taxes. However, it the tax is too onerous, it will spur people to work around tax regulations, which in the long run, defeats the original objective of increasing the government’s revenue. (Apparently, this is exactly what’s happening in this current gold issue.) Moreover, excessive tax rates have the tendency to stimulate the growth of the black market. The idea is to make the tax reasonably acceptable so that people will want to deal with and pay the government. There is really no need to make adversarial, the relationship between the BIR and the taxpayer.

      • Handiong

        What is “onerous” is a relative judgment. Some, or most, people think the tax on cars is onerous, and yet they have no choice but to pay it. If there are people who work around tax regulations, then the BIR must go after them. If there are black markets, then the government must crack down on them. The government must not be intimidated into being remiss in its duty to work for the best interest of the general public just because there are those who are willing to break the law. If the relationship between the BIR and the taxpayer is adversarial, it is because of the taxpayer’s refusal to comply with the tax laws. Don’t blame it on the BIR’s enforcement of the tax laws. I’m really glad that we have a BIR chief in Kim Henares who is finally making sure that people pay the correct taxes..

    • payutenyodagimas

      we have a law to follow. whats wrong with that?

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