BIR eyes unit to go after rich individuals
THE BUREAU of Internal Revenue’s (BIR) collection from large firms last year increased to P881.48 billion, but missed the P1.05-trillion goal.
To further shore up collections, Finance Secretary Cesar V. Purisima yesterday proposed to put in place a spinoff unit at the BIR that could go after “high net worth individuals.”
While the BIR has been making inroads as far as ramping up collections from large companies, Purisima lamented in a speech that the tax base remained “narrow.”
The LTS is doing a good job but we need to expand the base because this country is not just 2,000 companies. There are more than 2,000 companies and individual that make this economy vibrant and make it grow,” the Finance chief said.
Purisima challenged the BIR to further expand the tax base, one way of which is by creating a second-tier taxpayer category in the LTS to cover very rich individuals.
“High net worth individuals are still lagging behind in terms of their share in nation-building, in paying taxes. My proposal is for the BIR to create a high net worth large taxpayer group,” Purisima said.
Article continues after this advertisementAt the tax campaign kickoff of the BIR’s Large Taxpayers Service (LTS), Assistant Internal Revenue Commissioner Nestor S. Valeroso disclosed that collections from 2,320 large companies grew by 7 percent in 2015 from P824 billion in 2014.
Article continues after this advertisementThe amount collected by LTS, however, was 16-percent below the target for 2015, the first year that collections from large taxpayers should have breached the P1-trillion mark.
The LTS’ take accounted for 61.15 percent of the BIR’s total 2015 collections of more than P1.4 trillion. The country’s biggest tax collection agency also missed its total 2015 collection target of P1.674 trillion.
For 2016, the LTS is tasked to collect P1.23 trillion, or 62 percent of the BIR’s collection goal of P2.026 trillion.
The BIR defines large taxpayers as corporations with an authorized capitalization of at least P300 million registered with the Securities and Exchange Commission; multinational enterprises with authorized capitalization or assigned capital of at least P300 million; publicly listed corporations; universal, commercial and foreign banks; taxpayers with an authorized capitalization of at least P100 million belonging to the banking, insurance, petroleum, telecommunications, utilities, alcohol and tobacco industries, and corporate taxpayers engaged in the production of metallic minerals.
Under Revenue Memorandum Order No. 2-2016 issued by Commissioner Kim Jacinto-Henares last January, the LTS was tasked to collect a “preliminary goal” amounting P1.04 trillion. Also allocated to the LTS was collecting P170.3 billion in excise taxes.
This year, the LTS was to collect P9 billion in income tax from Malampaya operations as well as final withholding taxes of the Bangko Sentral ng Pilipinas worth P10.1 billion.
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