MANILA, Philippines - The Bureau of Internal Revenue (BIR) has formed a committee that would closely monitor tax eroding measures and investment incentives programs of the government in a bid to help boost state coffers.
BIR Commissioner Joel Tan-Torres has assigned BIR Deputy Commissioner Lucita Rodriguez as chairperson of the soon-to-be-created tax exemptions and incentives committee. The BIR’s monitoring committee is composed of nine officials from the different offices of the agency with lawyer Edwin Abella from the Office of the Commissioner as co-chairperson of the group.
The committee shall be responsible for drafting revenue regulations implementing newly-enacted laws granting tax incentives and exemptions. It shall likewise prepare a study in quantifying tax eroding measures, their impact on revenue goal determination and performance evaluation.
To complement such tasks and to ensure stricter implementation of relevant laws by the revision of existing revenue issuances, Tan-Torres said the committee would review and monitor tax eroding measures/bills and their implementing rules and regulations.
The BIR has a collection goal of P830 billion this year, lower than the previous estimate of P875 billion.
Tan-Torres said the agency sought a lower goal because of revenue-eroding measures approved by Congress.
According to estimates made by the Department of Finance, roughly P60 billion will be lost yearly because of these so-called revenue-eroding measures.
These measures include the lowering of the corporate income tax rate to 30 percent from 35 percent which is expected to translate to revenue losses of P15 billion to P20 billion yearly.
Another measure is the Minimum Wage Law which exempts minimum wage earners from income taxes. The government expects to incur losses of roughly P26 billion a year from this measure.
The National Tourism Act, meanwhile, is estimated to translate to P3 billion in foregone revenues.
Another measure, the imposition of franchise tax on power transmission in lieu of all national and local taxes, is expected to leave a dent on state coffers amounting to P9 billion a year.
The so-called Personal Equity Retirement Account (PERA) Act of 2008, a tax-free pension scheme for retiring individuals, meanwhile, would cost the government P7 billion yearly.