1st time in history: BIR eyes P1-trillion collection

By Iris C. Gonzales, The Philippine Star

Posted at Oct 25 2012 07:18 AM | Updated as of Oct 25 2012 10:32 PM

MANILA, Philippines - The Bureau of Internal Revenue (BIR), which accounts for 70 percent of total government revenues, will easily be able to collect at least P1 trillion this year, the first time in the 108-year history of the bureau.

BIR Commissioner Kim Henares said hitting the P1-trillion level in collections is almost a done deal but hitting the actual revenue target of P1.066 trillion remains to be seen.

“We will not have a problem hitting P1 trillion and we will work hard to achieve the P1.066-trillion target,” Henares told reporters yesterday.

She said that some initiatives put in the place by the bureau have been paying off and could help the agency achieve the target.

The newly launched VAT Audit Program of the BIR, for instance, has been effective, Henares said.

“If you look at the VAT performance system, there is now an improvement. It’s is now closer to the target,” she said.

The BIR launched last month a VAT Tax Audit Program, which is part of efforts to meet the agency’s goal of exceeding the VAT collection goal of P226.18 billion for the year and the BIR’s total revenue target of P1.066 trillion.

Henares earlier issued Revenue Memorandum Order 19 and 20-2012 detailing the pilot areas of the VAT Tax Audit Program for its Large Taxpayers and Metro Manila Revenue Regions such as Caloocan, Manila, Quezon City and Makati.

Under the two BIR orders, a VAT Audit Team composed of a VAT Audit Manager and Revenue Officers will audit and investigate the first and second quarter VAT returns of 2012 of Large Taxpayers and NCR taxpayers and every quarter the reafter.

The audit will not cover VAT returns with tax credit and refund claims or those under audit by the Special Investigation Divisions (SIDs) and the National Investigation Division (NID).According to the BIR, any of the following criteria will be applied in selecting VAT taxpayers for audit: Taxpayers whose VAT compliance is below the established 200 and 2011 industry benchmarks; taxpayers whose VAT returns for the succeeding quarters show substantial decrease in tax payment; taxpayers whose VAT returns reflect substantial input taxes from importations and local purchases, such as when the total purchases claimed exceed 75 percent of the total sales.

Taxpayers with no VAT return filed in any quarter or all the quarters in 2011 may also be audited.