MANILA, Philippines - The Bureau of Internal Revenue (BIR) said yesterday it would enforce stricter audit of business conglomerates as part of efforts to boost state coffers.
Conglomerates are groups of related corporations with diversified business activities in different industries which are controlled and operated by a parent corporate entity. Among the conglomerates in the Philippines are those owned by taipans Henry Sy, Lucio Tan and Andrew Tan.
BIR Commissioner Joel Tan-Torres said there are unique issues prevailing among these conglomerates which the BIR will identify and take necessary action on.
As such, Tan-Torres has issued policies and guidelines for taxable year 2009 to help address the prevailing tax issues on the operations of these businesses and strengthen the agency’s investigation and enforcement activities in this particular sector.
Under the program, there would be examiners assigned to look into the practices of inter-company charges and transactions among related parties.
“Through this Conglomerate Audit Program, the BIR will conduct a special tax investigation of over 20 conglomerates by a group of tax examiners familiar with the practices of transfer pricing, inter-company charges and other transactions between related parties,” he said.
Tan-Torres said the BIR offices tasked to carry out the audit activities of this program are the Large Taxpayer Service (LTS), both Regular and Excise, and the Enforcement Service (ES).
“The revenue officers under the special audit teams shall undertake simultaneous, joint and coordinated examinations of the books of accounts of these identified taxpayers, covering all internal revenue taxes for taxable year 2009,” he said.
Furthermore, under the program, Tan-Torres said the audit will be concluded within six months.
The investigation teams will also prescribe issuances and guidelines that will govern the tax treatment of transactions of conglomerates.
The BIR which is tasked to collect P830 billion this year, has been looking into various ways on how to raise taxes.
According to the latest preliminary data from the BIR, the agency has exceeded its March collection goal by P1.4 billion to P54.8 billion from its original target of P53.4 billion for the month.
This brought the BIR’s first quarter collections to P170.4 billion or P12.7 billion more than the goal of P157.7 billion, data also showed.