Congress of Philippines : BIR should plug tax collection holes before Congress considers new taxes - Alvarez

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SOURCE: Press and Public Affairs Bureau

BIR should plug tax collection holes before Congress considers new taxes - Alvarez
16-January-2017, 04:31:53 PM

House Speaker Pantaleon Alvarez wants the Bureau of Internal Revenue (BIR) to plug holes in its revenue collection efforts before Congress considers a proposal to impose new taxes on petroleum products.

In a radio interview, Alvarez noted for example that while the country's VAT (Value Added Tax) stands at 12 percent, the collection figure is only around 4.3 percent of the gross domestic product (GDP), which is similar to the collection level in Thailand even if the latter imposes only 7 percent as VAT.

Alvarez said the current VAT collection is a lot lower than the expected revenue take of the government from VAT.

'Tingnan natin yung figures. Bakit mag-a-address tayo ng ibang bagay, kokolektahan natin, papatawan natin ng taxes yung ibang bagay para lang to cover the inefficiencies of BIR doon sa tax collection natin?' Alvarez said.

Criticisms have been mounting against the government's proposal to impose an additional tax of P6 per liter for diesel as well as cooking gas and bunker fuel for generating electricity. In addition, the government eyes increasing the tax on gasoline from P4.35 to P10 per liter.

Jeepney transport groups have warned that the imposition of new taxes would force them to seek an increase in the current minimum fare from P7 to at least P10.

According to Alvarez, imposition of new taxes may even prove to be unnecessary --- or at lower rates, if at all needed --- should the BIR manage to improve its collection efficiency, particularly for VAT.

For instance, Alvarez suggests that the BIR should link its computers with the computers used as point-of-sale terminals of businesses to ensure accurate data on sales and the payment of appropriate taxes.

He believes the VAT collection effort was stymied by collusion between some corrupt BIR officials and unscrupulous businessmen who use fake receipts to show zero tax liability.

'Kaya po yung koleksyon natin ganoon kababa doon sa VAT. So siguro, i-address din ng BIR, yung inefficiency ngayon. Hindi pupuwedeng hindi nila i-address yun at basta magdadagdag na lang ng taxes doon sa ibang bagay,' Alvarez stressed.