BIR seeks faster action on tax cases

Internal Revenue Commissioner Kim Henares. INQUIRER FILE PHOTO

The Bureau of Internal Revenue has called for a speedy resolution of the cases it filed with the Department of Justice amid views that the slow progress of the cases was dragging the government’s anti-tax evasion drive.

Internal Revenue Commissioner Kim Henares said tax officials have communicated with their counterparts in the DOJ the need for a faster processing of the cases.

Tax officials said convictions would help put teeth to the BIR’s campaign against tax evasion, which is blamed for the huge potential revenue losses for the government.

The BIR so far has filed a total of 207 tax-evasion cases with the DOJ since 2010 under its Run After Tax Evaders (RATE) program.  Most of these cases are still pending with the DOJ and have not been forwarded to courts.

“We [BIR officials] have been talking with them [justice officials] about the matter. They said the DOJ’s task force in charge of the tax evasion cases recently have been reorganized,” Henares said.

Under the RATE program, which is meant to discourage the public from evading taxes by under-declaring incomes, the BIR files at least one tax-evasion case with the DOJ every two weeks.

The BIR, which accounts for more than 60 percent of the national government’s revenues, is pressed to strengthen its anti-tax evasion campaign amid the government’s rising expenditure requirements.

The need to improve tax collection is also highlighted by the huge foregone revenues resulting from tax evasion.

Based on estimates by the World Bank, the Philippine government loses about P450 billion in revenues a year due to tax evasion.

Besides the regular filing of tax-evasion cases, other measures are being implemented by the BIR to shore up revenue collection. For instance, it has been issuing revenue regulations detailing tax obligations of sectors where tax evasion is seen rampant.

One of the revenue regulations it issued in 2013 detailed the tax liabilities of operators of privilege stores, also know as “tiangge.” Under the regulation, organizers of privilege-store centers are required to withhold certain taxes of the privilege store operators to ensure payment to the BIR.

Another was the revenue regulation requiring hospitals, health maintenance organizations and clinics to withhold taxes of doctors and other medical practitioners. The regulation was issued last year amid allegations that high-earning medical practitioners were among the biggest evaders of individual income tax.

The BIR was tasked to collect P1.25 trillion in taxes for 2013. Official data on its collection will be released in February, but estimates point to a potential shortfall.