500 taxpayers in medium category

Jeandie O. Galolo

THE Bureau of Internal Revenue (BIR) 13 has identified 500 taxpayers that will shoulder at least 32 percent of this year’s tax collection target of P29.3 billion.

Recently classified by BIR as medium taxpayers, they consist of the top 500 non-individual taxpayers of Cebu and Bohol that satisfy the criteria for large taxpayers but have not qualified or have not been notified by the commissioner bureau as such.

“We are closely monitoring this segment,” said BIR 13 Director Aynie Mandajoyan-Dizon, who met with the top 500 taxpayers in SM City Cebu Trade Hall last Tuesday. All BIR revenue regions in the country are likewise doing the medium taxpayers segmentation program.

In 2016, the top 500 companies identified recently as medium taxpayers in Cebu and Bohol paid a total of P6.491 billion in taxes, or 24 percent of the P26.69 billion taxes collected in the said year.

BIR said the segmentation program helps monitor the tax compliance of the taxpayers. In addition, a segmented taxpayer profile could facilitate a more focused tax campaign and collection effort.

Over the next three years, Dizon said the plan is to expand them to 1,500 medium taxpayers.

“These 500 taxpayers who contribute 24 percent of the taxes collected in 2016, if tripled (to 1,500), will contribute 75 percent to 80 percent of the collection. We will be able to reach our target,” Dizon said.

Medium taxpayers, however, do not include national government agencies, local government units, government owned- and/or -controlled corporations (GOCC), and state universities and colleges.

Melanie Ng, president of the Cebu Chamber of Commerce and Industry (CCCI), expressed the business group’s support for the medium taxpayers segmentation, where some of its members have become part of.

“We thoroughly appreciate the intitiative undertaken by the bureau to improve the tax payment process through better engagement with us, the taxpayers,” Ng said in a speech delivered before BIR officials and taxpayers, citing BIR’s tax segmentation and electronic payment system.

The business leader also encouraged fellow business owners to be compliant and pay the right taxes. Having a proper tax collection mechanism, she said, would mean a timely roll out of government projects and programs.

“Undeniably though, our country has one of the highest income tax rates in the Asean region. In order for us to be able to compete in the global arena, we hope the tax reform program will soon be adapted to help address the high cost of doing business and contribute to our global competitiveness,” she stressed.

“We eagerly anticipate the current administration’s plan under President Rodrigo Duterte to overhaul our tax system,” Ng added.

Currently, the tax gap in the country, or the difference between the annual amount of taxes owed and the amount voluntarily paid on time, is very much present, said BIR.

The tax gap comes from three main areas of non-compliance with the tax law: underreporting of taxable income, underpayment of taxes and non-filing of returns.

Data from the Philippine Statistics Authority (PSA) and the Bureau of Internal Revenue (BIR) in the first quarter revealed that 27.9 percent of taxes high-income earners should pay are uncollected as a result of a flawed system.

Instead, taxpayers who are mostly compensation earners and whose taxes are automatically deducted from their monthly salary shoulder most of the tax burden, with minimal tax gaps of between 3.6 percent and 9.7 percent.

As of January to September, BIR 13 has collected P20.3 billion, or 6.89 percent deficit from the nine-month period goal of P21.8 billion, but 13 percent higher than the actual collection recorded in the same period last year.

In the last quarter of the year, BIR 13 needs to collect P9 billion to achieve the P29.3 billion goal.