BIR keeps close watch on luxury car buyers

MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main revenue agency, will keep a close watch on buyers of luxury cars to determine if there are possible cases of tax evasion.

BIR Commissioner Kim Henares clarified there is no ongoing witchhunt against buyers of luxury cars but just the regular monitoring of tax payments.

“There’s no witchhunting. If they are paying the right taxes, they should have no problem,” Henares told The STAR.

Lexus Manila, Inc. president Daniel Isla was quoted last week as saying that consumers are now downgrading to the more affordable luxury full-sized sedans for fear of being audited by the BIR.

Isla said sales of luxury cars are likely to hit just 2,200 units in 2012, down by 300 units from 2,500 sold in 2011.

Luxury car brands like BMW, Audi and Mercedes Benz are reportedly less preferred now than before.

The BIR said despite the reported decline in sales, the BIR would continue to look at purchases of luxury cars as part of its regular monitoring of business activities and tax payments of individual and corporate taxpayers.

“We see people buying these assets but if you look at their record they don’t have income and if they report their income, their taxes are not paid,” she said.

She advised those who get luxury vehicles as gifts to make sure that they pay the donor’s tax.

The BIR is stepping up efforts to boost collections and meet its revenue goal of P1.06 trillion this year.

In July, the BIR collected P83.52 billion, lower than the target for the month of P87.35 billion but higher by P9.73 billion or 13.18 percent compared to year-ago figures.

The July collections brought the BIR’s seven-month tax-take to P604.68 billion, below the target for the period of P622.708 billion.

However, compared to collections in the same period last year, the BIR’s end-July revenues were higher by P72.89 billion or 13.71 percent.