BIR collections seen to grow by 14% in ’11

The Bureau of Internal Revenue expects collections on corporate income tax and the value-added tax to both grow by 14 percent this year following efforts to strengthen its campaign against tax cheats.

Data show that the agency is striving to collect P319.6 billion in corporate income tax, and P196.2 billion in VAT.

In 2010, the tax yield from business earnings reached P280 billion, while VAT revenue came in at P172.2 billion.

In the 14 months of the Aquino administration, the BIR has filed with the Department of Justice (DoJ) a total of 67 tax evasion cases under its Run after Tax Evaders (RATE) program.

The agency attributed the gain in momentum of the RATE initiative to information provided by third-party sources and whistle blowers, apart from delinquent accounts, taxpayer’s lifestyle check system and pending cases with the DoJ.

Bureau officials said that the VAT system itself helps improve the agency’s ability to track erring taxpayers because it provides a paper trail.

VAT-registered taxpayers provide the BIR with a list of their suppliers and their tax payments.

In particular, large companies declare their suppliers and VAT payments credited to them.

Also, it was the VAT trail that led to the filing of several tax evasion cases against celebrity endorsers because companies had submitted the names of their suppliers and the amount of their transactions with them.

When data provided by these related taxpayers do not tally, the BIR will have enough evidence to build a case against suspected delinquents.

Last week, the BIR announced that it collected a total of P87.93 billion in August, up by 11.2 percent from the P79.1 billion posted in the same month last year.

With last month’s collection, revenue in the eight months to August reached P619.71 billion—an increase of 13.4 percent from the P546.37 billion recorded in the same period last year.

But the eight-month collection was P7.4 billion, or 1.2 percent, short of the P627.11-billion goal.

The BIR, whose collections represent about three–quarters of the government’s yearly revenue, needs to meet its target to help bridge the budget gap. This year, Malacañang expects to spend P300 billion over budget.

The Bureau of the Treasury reported that, as of end-July, the government’s fiscal position has settled at a deficit of P43.71 billion.