BIR tax take in Duterte’s first year up to P1.643 trillion
The taxes collected by the Bureau of Internal Revenue in the first year of the Duterte administration reached P1.643 trillion on the back of tax administration reforms introduced by the country’s biggest revenue agency.
In a statement released by the BIR Wednesday on the occasion of its 113th anniversary, the agency said its collections from July last year to June this year rose 8.6 percent compared with the same 12-month period a year ago.
The BIR attributed the higher tax take to “ongoing tax administration reforms with three principal objectives: attain collection targets, improve taxpayer satisfaction, and protect revenues and recapture public trust.”
In 2016, the BIR’s collection rose 9 percent to P1.567 trillion, although it failed to hit its P1.62-trillion target.
Meanwhile, the BIR’s first-half tax take grew 8 percent year-on-year to P848 billion, albeit 4-percent lower than the P881.7-billion goal.
According to the BIR, “a 5-percent increase in taxpayer base or 882,615 new registered individuals and 32,306 new registered corporations helped increase collection performance.”
Also, “as of June 2017, a total of 1,463 new personal were hired to improve taxpayer service while documentary requirements and processes were streamlined—for example, for business registration, from 13 to five documents, and from seven to three steps.”
The BIR added that it also meted out punishment against erring tax examiners.
“In fact, 379 revenue officers were called to explain due to taxpayer complaints. This is after Commissioner Caesar R. Dulay suspended all BIR audit, which is said to be the source of corruption. Erring examiners were put under investigation after being asked to resign if they will not stop corrupt practices,” the BIR said.
In his first day as BIR chief, Dulay suspended taxpayer audits and recalled letters of authority, the official document that empowers revenue officers to examine and scrutinize taxpayers’ books in order to determine their correct tax liabilities.
“While Commissioner Dulay suspended all BIR audits during his first three months, he led an intensive tax enforcement generating P53 million from tax mapping operations of 169,351 establishments, P142 million from ‘Oplan Kandado’ wherein 55 establishments were closed, and at least P40-billion estimated liabilities fro 40 Run After Tax Evaders (Rate) cases filed to the Department of Justice,” according to the BIR.
The agency padlocks tax-deficient establishments under its “Oplan Kandado” program, while it brings alleged tax evaders to court through Rate.
The BIR had also filed before the DOJ three tax evasion cases against homegrown cigarette manufacturer Mighty Corp. and its top executives for a total of P37.9 billion in unpaid excise taxes due to alleged use of fake tax stamps.
In his recent State of the Nation Address, President Duterte ordered the BIR and the Department of Finance to accept Mighty’s tax settlement offer of P25 billion, under which the firm “will no longer engage in the tobacco business.”
Mighty is the second biggest cigarette manufacturer in the country after PMFTC Inc., the joint venture of tycoon Lucio Tan and global giant Philip Morris International.
“This will be the biggest tax settlement on record. It will produce a windfall for government, which is significant, since we face the unexpected costs of rebuilding Marawi and Ormoc,” President Duterte said in his Sona, referring to the two cities flattened by fighting between government forces and ISIS supporters as well as damaged by a recent earthquake, respectively.
But the President said “the acceptance of the tax settlement offer does not preclude other criminal charges against the company that the BIR may decide to file.”
The government decided to settle with Mighty as it wanted “to avoid a long court battle that, as we saw in previous cases, could take years to resolve,” the President explained.
The tax settlement amount will be funded by the sale of Mighty’s assets and distribution network to the Philippine unit of Japan Tobacco International.
Finance Secretary Carlos G. Dominguez III had said the government expects to collect up to P30 billion, including value-added tax, from the settlement with Mighty.
The government had already accepted an initial P3.44-billion payment from Mighty and JTI.