BIR creates ‘medium’ taxpayers category for efficient collections

Main office of the Bureau of Internal Revenue (File photo AFP)

The Bureau of Internal Revenue (BIR) has designated a new category of “medium” taxpayers that the country’s tax agency will closely monitor in 12 areas to shore up collections.

Revenue Memorandum Order (RMO) No. 17-2017 issued by Internal Revenue Commissioner Caesar R. Dulay on July 17 designated as medium taxpayers the firms that contribute the biggest share in total BIR collections in the following revenue regions: Calasiao, Pangasinan; San Fernando, Pampanga; Caloocan City; Manila; Quezon City; Makati City; Cavite-Batangas-Mindoro-Romblon; Laguna-Quezon-Marinduque; Negros Island Region; Cebu City; Cagayan de Oro City; and Davao City.

RMO 17-2017 defined medium taxpayers as “the top 500 non-individual taxpayers of the [12] revenue regions that satisfy the criteria for large taxpayers but have not been notified by the Commissioner of Internal Revenue as such.”

Under BIR rules, large taxpayers include 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.

However, medium taxpayers will not include national government agencies, local government units, government owned- and/or -controlled corporations, and state universities and colleges, the RMO said.

Dulay ordered the establishment of a system, including regional and national teams, to monitor and improve the compliance of the top taxpayers in the 12 revenue regions.

The BIR chief earlier disclosed plans to further subdivide the categories of taxpayers and designate specific offices that will oversee taxpayer compliance to further expand the tax base.

In January, Dulay said that besides the existing Large Taxpayers Service, the BIR wanted to introduce new categories such as the small and medium taxpayers’ units.

The BIR chief had said that segmenting the taxpayer profiles would facilitate a more focused tax campaign and collection effort. “We can capture more into the tax net,” according to Dulay. JPV