BIR goes after banks, insurance firms, eyes P1.5B in additional collections

With its sights set on banks, insurance companies and private corporations, the Bureau of Internal Revenue (BIR) expects to collect an additional P1.5 billion in tax arrears by the end of the year.

As this developed, the BIR warned that delinquent taxpayers will soon lose the opportunity to avail themselves of voluntary assessment and will be forced to pay the full penalties for various violations.

Finally breaking out of its long losing streak, the BIR said its initial effort to go after corporate taxpayers is finally starting to yield results, beginning with its record performance in November.

BIR Commissioner Guillermo Parayno said yesterday that the bureau is preparing a revenue regulation that will offer an incentive for voluntary assessment during a grace period.

Under the revenue regulation, delinquent taxpayers could avail of the voluntary assessment program and pay their tax arrears and only half of the five percent surcharge on their unpaid tax obligations.

Parayno explained that under the proposed regulation, all liabilities discovered by the BIR in 2001 until the first half of 2002 would be eligible for voluntary assessment and the 2.5 percent surcharge.

"If we discover that there are still violators after this period, they would have to face the full brunt of the penalties for tax violations," Parayno said.

According to Parayno, the BIR is dead-set on going after delinquent corporate taxpayers which had been the BIR’s primary source of incremental revenues in the last two months.

BIR’s performance in November was boosted by an increase in taxes collected from net income and profits and value added tax (VAT) which grew by 12.5 percent and 21 percent, respectively.

"We are sending a message that we have ways of determining whether or not people are paying the right taxes," Parayno said. "So we can do this the hard way or we can do this the easy way."

According to Parayno, BIR’s Voluntary Assessment and Abatement Program (VAAP) has a 60 percent compliance rate and to date, over P3.8 billion worth of mis-declared VAT arrears have been settled in cash.

Parayno said about P2 billion more have been covered with commitments to pay. The taxpayers, he said, are expected to settle their arrears in installments.

Parayno also revealed that the BIR detected about P700 million worth of discrepancy in the creditable withholding taxes paid by at least 14 banks. He said the banks have already been informed that they are in arrears and they have already committed to settle as soon as possible.

Insurance companies also fell into the BIR net which detected around P426 million worth of unpaid documentary stamp tax (DST), involving at least 42 insurance companies.

According to Parayno, some insurance companies have already promised to pay the BIR a total of P300 million. The remaining P245 million, he said, would be paid in installments while around P78.8 million have already been paid in cash.

On the other hand, Parayno said BIR’s efforts to collect taxes from independent power producers (IPPs) yielded revenues of up to P600 million.