BIR acquires nationwide data of business-tax filers
Joel M. Sy Egco
Manila Standard
AN EXECUTIVE order now in effect will make it harder for tax dodgers to cheat while boosting Internal Revenue’s collections by as much as 30 percent, an official said yesterday.
Executive Order 646 provides for information exchange between Internal Revenue and local treasurers, and it took effect recently after the Finance Department issued its implementing rules, said Victor Endriga, president of the Philippine Association of Local Treasurers and Assessors and treasurer of Quezon City.
“I am very happy that this is now in effect. This will greatly boost the income not only of the BIR but of all local government units as well,” Endriga said.
“This time, there will be no more room for excuses for tax shortfalls because the national government and the [local government units] will help each other in monitoring tax collections,” he said.
President Arroyo signed the order late last year, and it allows Internal Revenue to obtain any information on all taxpayers from local government units, among other things.
The order, Endriga’s idea, took effect Wednesday when Finance Secretary Margarito Teves signed its implementing rules at the treasurers’ associations’ national convention.
“This is a dream come true,” Endriga said.
“I have been pushing for this sharing of information. We are thankful to Secretary Teves for his prompt action.”
The rules compel all local government units to submit to Internal Revenue on or before April 15 each year a list of all businesses under their jurisdiction—and Internal Revenue to comment on the list on or before June 30.
Endriga said the new system would allow Internal Revenue to track down all those cheating on their taxes because it would be sharing its taxpayer database with all local government units.
“For example, if in Quezon City a businessman declared his income at P10 million and at the BIR he declared P20 million or vice versa, we could easily determine if he misdeclared his income,” he said.
Internal Revenue collected P750 billion in taxes last year.
Endriga said the bulk of the new taxes to be collected using the new system would come from small and medium enterprises including mom-and-pop stores—businesses comprising 80 percent of all enterprises in any given city.
He said Quezon City had 65,000 business establishments on its list, but Internal Revenue had only half that number.
“This is so because these small businessmen apply first for a DTI [Department of Trade and Industry] name before applying for a Mayor’s permit at city hall,” Endriga said.
“The BIR applications come in third in the process, but now the BIR permit comes first before city hall gives a business a permit to operate.