BIR gets more aggressive vs firms failing to record VAT liabilities

MANILA, Philippines - The Bureau of Internal Revenue has employed a more aggressive approach in catching companies which may be failing to fully report their value added tax (VAT) liabilities and non-remittance of VAT collection.

In Memorandum Order 16-2015, the BIR expanded the coverage of taxpayers under its VAT audit program for large taxpayers originally established in 2012.

The program now covers taxpayers with a VAT compliance below industry benchmarks and those whose summary list of sales and VAT returns have inconsistencies.

Taxpayers found to have submitted a different excess input tax carried in the current quarter versus what was recorded in their VAT returns from the previous three months will also be deemed as “high risk” following the new memorandum order.

At the same time, the BIR has increased the workload of revenue officers under the program to 30 from the previous 20.

“This revenue memorandum order is issued… for purposes of… prescribing measures to ensure timely conclusion of VAT audit cases and to clearly define the scope of audit to be conducted in the Large Taxpayers Service vis-a-vis the cases assigned to the VAT audit group,” the BIR said.

The VAT audit program was created in order to improve the voluntary compliance of taxpayers and to impose rules on the audit of VAT returns submitted by large taxpayers.

Latest data showed the BIR collected 10 percent more in the first half of the year at P705.87 billion from year-ago levels of P643.21 billion.

However, the six-month tally was still 13 percent below the agency’s goal of P812.09 billion for the period.

Revenues from large taxpayers climbed nine percent to P430.03 billion, while collections from regional offices rose 10 percent to P257.26 billion.

The BIR plans to collect P1.674 trillion this year, 25 percent more than the actual collection of P1.335 trillion in 2014.