Tag: Bureau of Internal Revenue (BIR)

VAT exemption in sale of residential properties hiked to P3.6 million

VAT exemption in sale of residential properties hiked to P3.6 million

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Those of you who own residential properties should be aware that the Bureau of Internal Revenue (BIR) formally announced that it has hiked the value-added tax (VAT) exemption in the sale of residential properties to P3.6 million (over P400,000 higher than previous), according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the news article of the PNA. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has increased the threshold for value-added tax (VAT) exemption for the sale of house and lot as well as other residential dwellings from nearly PHP3.2 million to PHP3.6 million.

This, as BIR Commissioner Romeo Lumagui Jr. has issued Revenue Regulations 1-2024, compliant with Section 109 (P) of the National Internal Revenue Code.

The adjustment reflected the commitment to align the threshold with present values every three years using the consumer price index as published by the Philippine Statistics Authority.

“This timely increase in VAT exemption shows our commitment to Excellent Taxpayer Service. This increase in the selling price threshold, for VAT exemption purposes, of the sale of house and lot, and other residential dwelling from PHP3,199,200 to PHP3,600,000 gives testament to the BIR’s improved and updated services,” Lumagui said.

The BIR said its focus on Excellent Taxpayer Service aligns with President Ferdinand R. Marcos Jr.’s recent signing of the Ease of Paying Taxes Act.

The enactment of the legislation pushes for a modernized tax system, aiming to assist taxpayers in fulfilling their obligations, Lumagui said.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you are a property owner, does the BIR’s act affect you? Do you think the raised VAT exemption will make a strong impact on many residential properties?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Withholding tax on online sellers could address revenue leakages

Withholding tax on online sellers could address revenue leakages

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With the 1% withholding tax on online sellers already in effect, there is potential that the said tax could address revenue leakages, according to a BusinessWorld news article.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE GOVERNMENT should ensure that it will be able to properly implement and monitor the collection of withholding tax on online sellers.

The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 16, which imposes a withholding tax on the gross remittances made by electronic marketplace operators and digital financial service providers to merchants.

Analysts said that the implementation of the withholding tax on online sellers will allow the BIR to better track transactions in the digital economy.

“The implementation of a 1% withholding tax on online sellers is intended to expand the tax base by addressing potential revenue leakages in the growing online retail industry,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

“Ideally, the withholding tax system should streamline the tax payment process for online sellers and should have no substantial impact on prices under the assumption that retailers are paying correct taxes,” she added.

Eleanor L. Roque, tax principal of P&A Grant Thornton, said that the measure provides the BIR an additional mechanism to “ensure that taxes are paid by the business owners since their income will also be reported by their withholding agents.”

Ms. Velasquez noted that the imposition of the withholding tax may also mitigate some instances of noncompliance by online sellers.

“This measure is expected to increase government revenues and promote transparency among companies engaged in online retail trade,” she added.

Ms. Roque said that the tax will be an “additional administrative burden” on electronic marketplaces.

“These entities will have to put controls in place to identify remittances to online sellers that are subject to withholding taxes,” she said in a Viber message.

Under BIR regulation, a withholding tax of 1% will be imposed on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or merchants for the goods and services paid or sold through their platforms or facilities.

However, the tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.

The regulation covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the withholding tax on online sellers will solve government revenue leakages?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

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Those who engage with selling online here in the Philippines and earn over P500,000 annually will have a new normal to live with as the Bureau of Internal Revenue (BIR) officially imposed the 1% withholding tax on online merchants that are found qualified, according to a Philippine News Agency (PNA) news article. Take note that BIR had been targeting online sellers previously and the Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

In the year 2022, the digital economy of the Philippines contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has announced that online merchants with earnings amounting to more than PHP500,000 annually are now subject to a 1-percent withholding tax.

BIR Revenue Regulation 16-2023, issued last December 21, said the withholding tax will apply to one-half of the gross remittances by electronic marketplace operators and digital financial services providers to the sellers or merchants for the goods or services sold through their platform.

The BIR defines an electronic marketplace as a “digital service platform whose business is to connect online buyers/consumers with online sellers/merchants, facilitate and conclude the sales, process the payment of the products, goods or services through such digital platform, or facilitate the shipment of goods or provide logistic services and post-purchase support within such platforms.”

These include marketplaces for online shopping, food delivery platform, and platform for accommodation booking.

The BIR clarified, however, that the withholding tax will not be imposed if the annual total gross remittances to an online seller do not exceed PHP500,000.

The withholding tax shall not apply “if the cumulative gross remittances to an online seller/merchant in a taxable year has not yet exceeded PHP500,000,” the BIR said.

Sellers subject to a lower income tax rate pursuant to any existing law are also excluded.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR made the right move? Do you think the imposition of the 1% withholding tax on online sellers (that made over P500,000 annually) will have a significant impact on e-commerce here in the Philippines? If you were planning to sell goods or services online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR admits taxing social media influencers is difficult

BIR admits taxing social media influencers is difficult

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As far as the Bureau of Internal Revenue (BIR) is concerned, implementing taxes on social media influencers and collecting from them are still hard to do, according to a Philippine Star news report.

To put things in perspective, posted below is an excerpt from the Philippine Star news report. Some parts in boldface…

The Bureau of Internal Revenue (BIR) continues to have difficulty in making social media influencers comply with the country’s tax laws even amid a widening adoption of various social media platforms as a form of income.

BIR Assistant Commissioner Jethro Sabariaga said the country’s largest revenue collecting agency remains in dialogue with social media influencers for them to pay their tax obligations to the government.

The BIR decided to seek a dialogue with the influencers in March this year. Sabariaga admitted that it is difficult for the BIR to get revenues from the digital space.

“Yes, (it is difficult). We will not mince with words. It might take some time, but that’s what we’ve been doing,” Sabariaga said.

“We are trying to win their side in the engagement process. The more that you can ask them to do voluntary compliance, the better rather than to fight with them,” he said.

BIR defines social media influencers as people whose digital posts are being monetized, classifying them as self-employed individuals or persons engaged in trade or business as sole proprietors.

The BIR earlier said it was looking into some 250 top earning social media influencers to see if they have been paying their obligations.

Based on BIR’s circular, influencers are required to pay income tax and percentage tax or value-added tax, if applicable, as mandated by the Tax Code.

According to the BIR, influencers derive their income from YouTube, sponsored social and blog posts, display advertising and affiliate marketing, among others.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the BIR’s plan to tax social media influencers? Is your favorite vlogger or YouTuber based in the Philippines who might have made some revenue online based on his or her output?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

National economic managers expect government collections to exceed 2023 revenue target

National economic managers expect government collections to exceed 2023 revenue target

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Even though it looks like that economic growth for the Philippines this year will end up short of 7%, the economic managers of the Marcos administration expect revenue collections to exceed the target for 2023, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA Network news report. Some parts in boldface…

The economic managers of the Marcos administration are expecting the government revenue collections this year to exceed target amid measures to improve tax administration and collection efficiency.

In a statement following a special coordination committee meeting on Friday, the Development Budget Coordination Committee (DBCC) said the “emerging total revenue collection for 2023 is estimated to be P3.84 trillion to P3.90 trillion.”

The projected revenue collection for the entire year is above the P3.73-trillion target set earlier by the DBCC.

In April, the economic managers set the revenue goal at P3.73 trillion this year, P4.184 trillion in 2024, P4.692 trillion in 2025, P5.255 trillion in 2026, P5.895 trillion in 2027, and P6.621 trillion in 2028.

The DBCC, chaired by the Budget chief, is composed of the secretaries of National Economic and Development Authority (NEDA), Finance (DOF), as well as the governor of the Bangko Sentral ng Pilipinas (BSP).

The DBCC, likewise, is expecting tax revenues to clock in at P3.50 trillion to P3.55 trillion, surpassing the target by about 15%.

The above-target revenue project resulted from the higher actual collections in the first nine months of 2023, which reached P2.84 trillion, up 6.8% year-on-year and exceeding the target for the period by 3%.

This, as both tax and non-tax revenues registered positive growth at 6.4% and 10.5%, respectively, “owing to the higher collections from the Bureau of Customs (BOC) and non-tax revenues of P152.57 billion.”

The DBCC said the Bureau of Internal Revenue (BIR) and the BOC are implementing several reforms to strengthen tax administration and enhance revenue collection, which include digitalization programs intended to eliminate corruption, increase transparency, and improve the ease of paying taxes.

Tax reform measures – Moreover, the economic managers said they will work closely with Congress for the passage of the previous administration’s remaining tax reforms on passive income and financial intermediaries taxation and real property valuation and assessment, as well as new tax measures.

“These include the excise tax on single-use plastics (SUPs), rationalization of the mining fiscal regime, motor-vehicle road users’ tax, excise tax on sweetened beverages and junk foods, tax on pre-mixed alcohol, value-added tax (VAT) on digital service providers, carbon taxation, capital market development bill, and the military and uniformed personnel (MUP) pension reform bill,” the DBCC said.

Meanwhile, the national government’s disbursement accelerated significantly from 93.4% of the program as of June 2023 to 98.9% as of September.

“This was mainly driven by the robust disbursement in the third quarter, reaching P3.82 trillion as of the end of September,” the economic managers said.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that government collections will exceed the 2023 revenue target?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Imposition of withholding tax on online sellers could happen before December 2023

Imposition of withholding tax on online sellers could happen before December 2023

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Those of you who have been engaging with online selling, you better brace yourselves as the Bureau of Internal Revenue (BIR) hopes to begin imposing a creditable withholding tax before December 2023, according to a BusinessWorld news report. Specifically, this move applies on partner-merchants of online platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is hoping to start imposing a creditable withholding tax on partner-merchants of online platforms before the start of December, an official said.

“The process could be shorter, and we might just come up with it before the start of December. It will not be unreasonable to expect it before the start of December,” BIR Assistant Commissioner Jethro M. Sabariaga told reporters on the sidelines of the SGV Tax Symposium last week.

“The longer you withhold this release, you’re hobbling a significant portion of today’s economic transactions,” he added.

The BIR last week released the final draft of the amendments to Revenue Regulation No. 2-98 which currently does not cover income payments by online platform providers.

Under the final draft, the BIR would impose a withholding tax of 1% on one half of the gross remittances by domestic e-marketplace operators to the online merchants for the goods or services sold through their facility.

However, the withholding tax will not apply if annual total gross remittances to an online merchant for the past taxable year has not exceeded P250,000, or if the cumulative gross remittances to an online merchant in a taxable year has not yet exceeded P250,000.

Also exempted are online merchants who are part of a cooperative duly registered with the BIR with a valid Certificate of Tax Exemption.

Mr. Sabariaga said the BIR took note of the suggestions and objections to the draft rules raised by affected sectors. The BIR’s deadline for comments from stakeholders on the final draft ended on Oct. 27.

“This will all be taken into consideration and then be studied and then the final draft will be released and exposed,” he said.

Since then, Mr. Sabariaga said the agency consulted with various industries to come up with the latest version of the draft.

“It’s the first exposition of the draft, you have to consider the various industries, the applicability of the withholding (tax) on the various industries, the rates, the economic provisions of it,” he added

The BIR has been seeking ways to tax the digital economy, particularly as e-commerce surged during the pandemic.

In 2022, the digital economy contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been regularly selling online, do you think you will be covered by the planned withholding tax by the BIR? Do you have all financial and legal records prepared?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR says that discounts for senior citizens and PWD for online purchases are mandatory

BIR says that discounts for senior citizens and PWD for online purchases are mandatory

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As far as the Bureau of Internal Revenue (BIR) is concerned, senior citizens and persons with disabilities (PWDs) are entitled to discounts over the online purchases they made, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA Network news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) on Wednesday said the discounts on purchases made online by senior citizens and persons with disabilities are mandatory.

“Online platforms should recognize the mandatory discounts given to senior citizens (SC) and persons with disabilities (PWD). The BIR has issued Revenue Regulation (RR) No. 8-2023 to this effect,” BIR Commissioner Romeo Lumagui Jr. said in a statement.

“The signature of the SC/PWD is not needed if the purchase is made through online means. The SC/PWD Identification card number should still be provided,” Lumagui said.

Under RR No. 8-2023, the BIR said that the signature of the SC or PWD shall not be required for qualified purchases made online or through mobile applications.

“Nonetheless, the SC/PWD Identification Card number should still be provided by the SC/PWD when purchasing through online or mobile platforms; and the rules on entitlement to the benefits of the SC/PWD and to the tax deduction… and to future issuances pertaining to SC/PWD purchases through online or mobile applications, shall be strictly followed,” the RR read.

Lumagui said the issuance is “a step towards making the BIR a service-oriented agency, not merely a goal-oriented one.”

Meanwhile, the BIR is proposing to impose a creditable withholding tax of 1% on one-half of the gross remittances of online platform providers to their partner sellers or merchants.

The taxman had defended the proposal, saying it is not a new tax and its collection is within existing laws.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that mandatory discounts on online purchases made by senior citizens and PWDs are justified? Do you think the BIR made the right move?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below and also please consider sharing this article to others. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. If you want to support my website, please consider making a donation. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram at https://www.instagram.com/authorcarlocarrasco/.

Department of Finance (DOF) says online sellers must pay equal taxes as physical stores

Department of Finance (DOF) says online sellers must pay equal taxes as physical stores

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As far as the Department of Finance (DOF) is concerned, those who sell online must pay equal taxes as the physical stores do, according to a Manila Bulletin news report. Take note that the Philippines continues to recover from the economic downturn of COVID-19 and the coronavirus itself no longer poses a danger to the nation.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news article. Some parts in boldface…

The Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

Finance Secretary Benjamin E. Diokno said the collection of withholding tax on online sellers by the Bureau of Internal Revenue (BIR) is driven by the principle of fairness, and it does not constitute a new tax.

Withholding tax is a type of tax collected from various income sources, including salaries, wages, interest, and other earnings.

“It’s a matter of fairness because if you buy from a regular store, you have to pay taxes. But here [in online business], you don’t have to pay, and that’s unfair,” Diokno told reporters.

Diokno stressed the need for individuals to view the tax system as fair and willingly fulfill their tax obligations.

The BIR has proposed a new rule that would require online platform providers, such as Lazada and Shopee, to withhold one percent of the money they pay to their partner sellers. This withholding tax would be applied to half of the total amount being paid.

The BIR explained that this is not an additional tax, but rather a way to enforce existing tax laws and ensure proper tax collection.

“It’s not only increasing tax revenues, it’s a matter of fairness. A good tax system should be fair. That should be one of the characteristics of a good tax system, fairness,” the finance chief said.

BIR Commissioner Romeo D. Lumagui, Jr. earlier said the tax agency aims to begin collecting a creditable withholding tax from online platform partner merchants by the fourth quarter of 2023.

Lumagui also said that their objective is to fully implement this tax by next year.

He also explained that the purpose of imposing taxes on online merchants is to ensure a level playing field between traditional brick-and-mortar retailers and those selling on digital platforms or marketplaces.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the DOF on taxing online sellers? If you own a physical store selling products, does the presence of local online sellers harm your business?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR targeting online sellers

BIR targeting online sellers

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If you have been engaging on selling items or services online, you should be aware that the Philippines’ authority on taxation the Bureau of Internal Revenue (BIR) is constantly watching you and it is seeking ways to tax you, according to a BusinessWorld news report. Already the BIR has been communicating with the e-commerce platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is looking to collect taxes from online sellers on e-commerce platforms more efficiently.

BIR Commissioner Romeo D. Lumagui said it is difficult to monitor taxes on individual online sellers on e-commerce platforms.

“We’re in constant communication with the platforms, because it’s a challenge to monitor. We’re thinking of ways to approach it because if we look at individual online sellers, it’s a bit difficult. It’s a challenge,” he told reporters on Thursday evening.

Mr. Lumagui said the BIR is prioritizing ways to better collect taxes from online sellers and other new platforms this year.

The pandemic forced many entrepreneurs to shift to online selling using e-commerce platforms like Shopee and Lazada, as well as social media platforms such as Facebook, Instagram and Tiktok.

As of 2022, the Department of Trade and Industry (DTI) estimated there are around two million entities doing business as online sellers.

In 2021, the digital economy contributed 9.6% to the country’s gross domestic product (GDP), or about P1.87 trillion. DigiPinas, the multi-sectoral initiative led by UBX Philippines Corp., earlier said the Philippine digital economy can grow to as much as $150 billion or about P8.3 trillion in the next decade.

Meanwhile, Mr. Lumagui said the BIR will tap social media influencers to help educate the public on the importance of paying taxes.

“They have reach and I think that one way of making people comply with tax obligations is to educate the people since tax is a very complicated topic not easy to understand,” he said, adding the BIR will schedule a dialogue with them.

Mr. Lumagui said the BIR will continue its efforts to collect taxes from social media influencers, since they’re earning income. He noted there are already some who are undergoing tax audits.

“What we want is to dialogue with them that these are your obligations as social media influencers, you’re earning from whatever you’re doing, so this is your responsibility as income earners,” he said.

The BIR said it collected around P44.6 billion worth of tax from online content creators and retail sales at the end of 2021.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been selling products or services online for the last twelve months, do you think the BIR’s move with taxing your business will negatively affect Philippine e-commerce as a whole? Have you set aside enough money for potential taxation by the BIR? What is the one thing about online selling that made you stay away from selling through physical establishments like a store?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR says half a trillion Pesos lost to tax evasion each year

BIR says half a trillion Pesos lost to tax evasion each year

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Tax evasion remains a very serious problem in the Philippines. As far as the Bureau of Internal Revenue (BIR) is concerned, the authorities lose around half a trillion Pesos each year due to tax evasion, according to a BusinessWorld news report.

To put things in perspective, posted below is the excerpt from the BusinessWorld news article. Some parts in boldface…

THE GOVERNMENT loses around P500 billion annually to tax evasion, according to a top Bureau of Internal Revenue (BIR) official.

“There is a lot, especially if we include those involved in illicit trade. In cigarettes alone, there’s around P100 billion,” BIR Commissioner Romeo D. Lumagui, Jr. said, when asked about revenue losses from tax evasion.

“Leakages aren’t part of that yet, like petroleum or vape products that aren’t registered, as well as fake receipts. I think it won’t go below P500 billion if you add everything up,” he added.

Mr. Lumagui said the BIR will have an easier time achieving its collection targets if it addresses tax evasion.

Earlier this month, the BIR filed 74 tax evasion complaints worth P3.5 billion against several companies.

“We will tailor efforts to improve digital services so businesses will leave the shadow economy and join the tax net. We will now focus on enforcement activities against tax evaders, put emphasis on tapping uncollected taxes through illegal activities,” Mr. Lumagui said.

The BIR is currently monitoring and investigating a number of suspected tax evaders.

“The most important right now is the selling of fake receipts and we know who (they are). We are investigating so we can file a case against those involved,” Mr. Lumagui said.

The BIR is targeting to collect P2.6 trillion in revenues this year.

“With all our activities and efforts we are making, we will be able to achieve the tax collection target,” he said.

In 2022, the agency collected a total of P2.34 trillion, surpassing its P2.1-trillion target.

Meanwhile, Mr. Lumagui said the agency will also review its policies after the Supreme Court declared void its regulations that require firms to disclose the personal information of investors.

“We must respect the privacy (of these investors) but when it comes to the correct amount of taxes, the BIR has auditing power. There is still a need to pay taxes and the compliance of these businesses needs to be monitored. When it comes to determining the correct amount of taxes, we can investigate that,” he added.

The Supreme Court declared that the BIR Revenue Regulations No. 1-2014 and Revenue Memorandum Circular (RMC) No. 5-2014 “void for being unconstitutional” as it violated the right to privacy.

The regulations require businesses to disclose investor information such as addresses, tax identification number (TIN), and birthdays, among others.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR will be able to collect P2.6 trillion this year even with tax evasion still going on? What do you think should be done to eradicate tax evasion all over the Philippines?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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