The Bureau of Internal Revenue’s (BIR) tax take in May jumped by almost a fifth, although this was still below the target for the month, data released on Thursday showed.
Separately, outgoing BIR Commissioner Kim S. Jacinto-Henares released two more issuances before she steps down next week: One concerning tax treaty benefit claims, and another clarifying that proceeds from properties disposed of tax-exempt corporations were not necessarily tax-exempt.
In a statement, the BIR said collections last month totaled P152.1 billion, up 18.4 percent year-on-year.
The take in May, however, was lower than the P196.1-billion goal.
Last May, collections from BIR operations—which include value-added, excise and percentage tax levies—reached almost P149 billion, posting a 19-percent growth year-on-year; while those from non-BIR operations slid 2.3 percent to P3.2 billion.
The take of regional offices hit nearly P49 billion, up 11.3 percent year-on-year, while the collections of the large taxpayers service (LTS) jumped 23.1 percent to P18.8 billion.
At the end of the first five months, the BIR collected a total of almost P660 billion, up by over a tenth compared with a year ago.
The end-May take was also below the P833.9-billion target for the five-month period.
As of end-May, collections from BIR operations increased by 11.1 percent year-on-year to P644.5 billion, while those from non-BIR operations dropped 3.9 percent to P624.3 billion.
Regional offices’ collections grew 10.9 percent year-on-year to P242 billion as of May, while the take of the LTS climbed 11.2 percent to P402.5 billion.
Also on Thursday, the BIR laid down procedures for the claim of tax treaty benefits for dividend, interest and royalty income of nonresident income earners.
“The Philippines, a jurisdiction with a total of 40 effective tax treaties, with two more treaties waiting to enter into force and two pending ratification, qualifies as a jurisdiction with a substantial network of tax treaties. To achieve the intent of these treaties of reducing double taxation and preventing fiscal evasion, administrative procedures in applying the provisions of these tax treaties must be duly established and enforced,” Henares explained in Revenue Memorandum Order (RMO) No. 27-2016.
This order amends RMO 72-2010, which the Tax Management Association of the Philippines (TMAP) wanted repealed.
Henares also issued Revenue Memorandum Circular No. 64-2016 on June 20, which clarified which corporations and associations were tax-exempt.
“Registration with the Securities and Exchange Commission as a nonstock, nonprofit corporation, foundation, association or institution does not automatically exempt it from paying taxes, Henares said, citing Sec. 30 of the Tax Code or the National Internal Revenue Code (NIRC).
Henares noted that the last paragraph of Sec. 30 stated: “Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and character of the foregoing organizations from any of their properties, real or personal, or from any of their activities conducted for profit regardless of the disposition made of such income, shall be subject to tax imposed under this code.”
“Thus, organizations and corporations enumerated under Section 30 of the NIRC of 1997 are subject to the corresponding internal revenue taxes imposed on income derived by them from any of their properties, real or personal, or any activity conducted for profit regardless of the disposition thereof, which income should be returned for taxation,” Henares said.
Covered by the tax exemption were: labor, agricultural or horticultural organizations; mutual savings banks not having a capital stock represented by shares, and cooperative banks without capital stock organized and operated for mutual purposes and without profit; beneficiary societies, orders or associations, operating for the exclusive benefit of the members; cemetery companies operated exclusively for its members; nonstock corporations or associations operated exclusively for religious, charitable, scientific, athletic, or cultural purposes, or for the rehabilitation of veterans; business leagues, chambers of commerce, boards of trade not organized for profit; civic leagues or those organized exclusively for the promotion of social welfare; nonstock and nonprofit educational institutions; government educational institutions; farmers’ or other mutual typhoon or fire insurance company, mutual ditch or irrigation companies, mutual or cooperative telephone companies.. and farmers’, fruit growers’, or associations operated as a sales agent for the purpose of marketing the products of its members.