Cebu deemed ‘sweet spot’ for tax revenues

CEBU, Philippines - The revenue potential in Cebu is considerably high given its strong economic and population growth, said the new regional director of the Bureau of Internal Revenue in Cebu. 

In an interview yesterday in his office, Alfredo Misajon, who is the former regional head of BIR in Quezon City, said Cebu is one of the "sweet spots" in the Philippines in terms of revenue potential. 

Misajon underscored the population growth in Cebu and its young demographics, strong purchasing power and educated workforce, which have been supporting its growth economically. 

The new local revenue chief said that Cebu's tax revenue growth has been one of the fastest growing in the last three years. 

Although last year, BIR 13, which collects taxes in Cebu and Bohol, failed to hit its P36-billion revenue target as it collected P26.6 billion, posting a P9.7-billion revenue shortfall versus the target. 

The 2016 collection, however, is up 2.7 percent or P700 million from P25.9 billion it collected in 2015.

Misajon said the tax goal for BIR 13 this year could have grown by 20 percent from the 2016-level.

He said that at least 73 large taxpayers previously registered with BIR 13 are now targeted to taken by the Large Taxpayers Division (LTD)-Cebu this year.

"Will it affect us? Yes it will. But there will be some adjustments in our collection goal," the revenue official said.

He noted they have to widen the tax base in Cebu to compensate this.

Misajon also looks forward to the big-ticket projects that could boost the agency’s tax collection.

"As per initial reports by our RDOs (revenue district offices), there are still big-ticket items.

Last month, the BIR released a circular outlining its priority programs aimed at serving the bureau’s three key objectives: attain collection targets, improve taxpayer satisfaction as well as to protect revenues and “recapture” public trust.

In order to attain collection targets, the bureau will: undertake “comprehensive taxpayer profiling and industry benchmarking”, expanding the list of covered industries; revive suspension and temporary closure of businesses for non-compliance with value added tax requirements under the “Oplan Kandado Program”; update zonal values, which are the basis for computing taxes on the sale or transfer of real properties; and broaden the tax base “by registering unregistered taxpayers/businesses as a result of tax compliance verification drives and third-party information.”

Furthermore, it is also expected to implement centralized arrears management in the bureau’s regional offices; review all cases pending with the Court of Tax Appeals and the Department of Justice “and exert effort to expedite resolution of these cases” as part of the Run After Tax Evaders (RATE) Program; exchange information with its American counterpart, Internal Revenue Service, as part of the US Foreign Account Tax Compliance Act; and expand the Compromise Settlement Program for large taxpayers. (FREEMAN)