More hopes pinned on large taxpayers

THE BUREAU of Internal Revenue (BIR) has adjusted the allocations of its collecting units to meet this year’s P1.704-trillion target as more companies and individuals were included under the agency’s Large Taxpayers Service (LTS).

“In view of the enlisting of additional taxpayers in the Large Taxpayers Service for CY 2015 (Calendar Year), this Order is being issued to amend... the Allocation of CY 2015 BIR Collection Goal, by Implementing Office,” Revenue Memorandum Order 4-2015 stated.

The LTS, which accounts for almost two-thirds of BIR’s total collections, added P195.92 million to its original allocation to bring its target to P1.07 trillion.

Revenue regions now have a P606.02-billion target, down from the previous P606.21 billion under RMO 2-2015.

BIR’s implementing offices now have a P1.676-trillion target for 2015.

Under Revenue Regulation 17-2010, a taxpayer becomes a candidate to become a “large taxpayer” if it satisfies at least one criteria based on tax payments, financial condition and results of operation.

For tax payments, the taxpayer should have satisfied any of the following conditions in the preceding year: P200,000 quarterly VAT returns for one quarter, P1 million in excise taxes, P1 million in annual income taxes, P1 million withholding taxes, P200,000 in quarterly documentary stamp taxes.

By financial condition and results of operation, a taxpayer becomes a candidate for LTS coverage when it reaches gross sales of at least P1 billion, net worth of at least P300 million, gross purchases of at least P800 million and is included in the Securities and Exchange Commission’s list of top corporate taxpayers.

BIR also updated its targets for each tax type, taking into account the expected P19.5-billion revenue loss from a new rule exempting employee perks under collective bargaining agreements and productivity schemes from tax.

Under the revised targets, taxes on net income and profits have been set at P1.024 trillion, down from the original P1.04-trillion target.

Targets for other tax types have been kept intact: P140.44 billion for excise taxes, P373.83 billion for value-added taxes, P79.14 billion for percentage taxes and P86.96 billion for other taxes.

BIR has issued Revenue Regulations No. 1-2015, formalizing the expansion of de minimisbenefits that are exempt from withholding and fringe benefit taxes.

“For as long as the benefit given under CBA and/or performance incentives combined does not exceed P10,000 per year, it will be considered a de minimis benefit and not included as part of the person’s taxable compensation and, therefore, not subject to tax,” BIR Commissioner Kim Jacinto-Henares had said in December.

BIR collections reached P1.098 trillion at end-October, P93 billion or 7.81% short of a P1.19-trillion target for that period but still up 10.54% from P993.54 billion in 2013’s comparable 10 months.

source:  Businessworld