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BIR probes tax payments of banks, insurers

As gov’t agency misses June 2014 collection target anew

Tax collections for June fell short of the state’s ambitious monthly target yet again, prompting authorities to look into the effects on businesses of slow government spending and the City of Manila’s truck ban.

Officials once again cited the need for further scrutiny of large taxpayers—primarily big conglomerates and other major businesses—amid possible discrepancies in their value-added tax (VAT) payments.

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“The Large Taxpayers Service (LTS) was instructed to specifically look into the tax compliance of the financial and insurance sector,” the Bureau of Internal Revenue (BIR) said in a statement. “The LTS was also instructed to assist in the filing of tax evasion cases if so warranted.”

For the month of June this year, the BIR collected P94.12 billion in tax revenues, P5.36 billion or 6.04-percent more than the collections made in June 2013. Total collections, however, were short of the monthly target of P107.4 billion.

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Collections by regional offices, which accounted for income tax returns of employees and small businesses, rose by 12.74 percent, while payments by large taxpayers grew at a slower 2.53 percent from last year’s levels.

Bureau of Internal Revenue. AFP PHOTO

For the first semester, the BIR collected P643.21 billion, P49.5 billion or 8.34-percent more than the collections made in the first half of 2013.

The BIR said it had ordered an intensive audit of large taxpayers. The agency said the LTS VAT audit has been reinvigorated and would work full time doing short VAT audits to correct taxpayer errors and detect violations with the end in view of improving VAT compliance.

Apart from questionable VAT returns of large taxpayers, the BIR also cited possible slowing business activity as likely reasons for the drop in collections.

It noted the “slowdown in government spending” and a possible slump caused by Manila’s truck ban. The BIR said businesses might be having problems getting their goods on time due to the delayed offloading of products at Manila’s ports.

Operations at the country’s biggest international and domestic freight terminals, all located in the Manila port area in Tondo, have been hampered by city hall’s decision to ban trucks during peak hours of the day, with the aim of reducing traffic in the capital.

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TAGS: banks, Business, insurance firms, tax collection
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