BIR requires owners, sellers of timber to pay VAT

The Bureau of Internal Revenue (BIR) is requiring owners and sellers of naturally-grown or planted timber to pay their value added tax (VAT) dues before the products are transported from their place of production or concession.

Timber, whether naturally-grown or cultivated, is one of the country’s most valuable wood products. As such, the BIR is working to ensure that appropriate taxes are paid for the sale of such wood products, whether naturally grown or cultivated.

 In a recently issued revenue regulation, the BIR said traders of naturally-grown or planted timber products must pay an advance VAT on the transport of these products.

The regulation covers owners and sellers who hold permits or agreements issued by the Department of Environment and Natural Resources (DENR). Naturally-grown or planted timber products that are harvested from industrial tree plantations are also covered by the regulation and are therefore subject to advance VAT payments.

The advance VAT is imposed at the rate of twelve percent of the value per cubic meter of a particular kind of timber product. The BIR regulation provides a schedule of values for the various types of timber products.

“Advance VAT payments made may be credited against an owner’s or seller’s output VAT on the actual gross selling price of the timber products,” the BIR said in its announcement yesterday.

However, in the case of the advance three percent percentage tax, the advance payment will be credited to the monthly or quarterly percentage tax return of the owner or seller, the BIR also said.

The appropriate forms for the filing and payment of the advance VAT, as well as further details on the new regulation may be obtained from the BIR’s various revenue district offices.

The BIR, the government’s main revenue earner, is tasked to collect P765 billion this year and P854 billion in 2008.

The agency is under heavy pressure from Malacañang and multilateral lenders to meet its revenue goals and allow the government to have more funds for social services and infrastructure spending.

Data showed that the agency’s collections increased by only 8.6 percent to P510.7 billion from P480.8 billion from January to September.

This is P45 billion short of the P566.9 billion target but officials said the agency is stepping up efforts to meet its revenue goals.