BIR eyes new taxpayer categories

The Bureau of Internal Revenue (BIR) plans to further subdivide the categories of taxpayers and designate specific offices that will oversee taxpayer compliance to further expand the tax base.

At last week’s House ways and means committee hearing, Internal Revenue Commissioner Caesar R. Dulay said that besides the existing Large Taxpayers Service, the agency also planned to introduce new categories such as the small and medium taxpayers units.

“For medium taxpayers, we will designate them to the regional directors so they can focus on them. For small taxpayers, we’ll delegate them to the revenue district officers,” Dulay said. He, however, did not define the distinction between small and medium taxpayers.

Segmenting the taxpayer profiles would facilitate a more focused tax campaign and collection effort, the BIR chief said. “We can capture more into the tax net.”

At present, the BIR defines large taxpayers as corporations with 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 production of metallic minerals.

Also, Dulay said they would continue the taxpayer profiling and benchmarking program started by Deputy Commissioner Nestor S. Valeroso, which the BIR chief said was “effective so far.”

The BIR would also move to update zonal valuations, which Dulay noted were not updated for 20 years now, to boost the collection of property taxes.

The BIR chief likewise enjoined negotiations on compromises for tax cases as well as the settlement for those pending with the Court of Tax Appeals.

“We also encourage a compromise program for those who want to settle their liabilities as long as within the parameters of the Tax Code. We don’t intend to make it difficult if they are willing to settle their obligations,” Dulay said.

The BIR’s tax take from its operations jumped by almost a tenth last year, making the country’s biggest tax-collection agency more optimistic that it would hit its even higher goal this year.

Dulay earlier told the Inquirer that tentative data as of early this month showed that collections from BIR operations for the entire 2016 grew 9.55 percent year-on-year to P1.54 trillion.

Collections of the Large Taxpayers Service (LTS) increased by 8.46 percent year-on-year to P962.16 billion while the take of regional offices rose 11.42 percent year-on-year to P576.17 billion, Dulay said.

The BIR missed its adjusted P1.62-trillion goal for 2016, although the collections growth outpaced the 8-percent total increase to P1.44 trillion in 2015.

Upon assuming office, the Duterte administration’s economic managers slashed the government’s 2016 revenue program, blaming supposedly below-target performance in the collection of tax and non-tax revenues during the first half or the final six months of the Aquino administration.

In 2015, the BIR collected a total of P1.43 trillion, up 7 percent year-on-year but below the P1.67-trillion target. This year, the BIR must collect P1.83 trillion, before further increasing its tax-take target to P2.19 trillion in 2018 and P2.44 trillion in 2019.