BIR expands list of large taxpayer base

The Bureau of Internal Revenue (BIR) has expanded the country’s large taxpayer base or those covered by the agency’s Large Taxpayers Service (LTS) group.

BIR Commissioner Sixto Esquivias IV said the move is part of the agency’s efforts to step-up revenue collection.

Esquivias issued Revenue Memorandum Order 1-2009 effectively reversing a previous order by his predecessor, former BIR Commissioner Lilian Hefti.

As such, Esquivias reenlisted a total of 489 large taxpayers under the LTS group. Last year, the BIR, then under Hefti’s watch, removed the 489 large taxpayers from the jurisdiction of the LTS group and transferred them to the concerned revenue district offices.

However, Esquivias said there is a need to expand the LTS group as part of efforts to boost revenues.

With the memorandum order, the LTS has added a total of 754 large taxpayers to its jurisdiction. These include the 489 that had been reenlisted and an additional 346 clients.

LTS now has roughly 2,000 clients.

The LTS group caters to large corporate clients including Top 1,000 corporations in the country.

These clients are those with net worth of P300 million and pay an annual income tax and withholding tax of at least P1 million. They also pay value-added tax of at least P100,000 for any quarter and P1 million in excise tax per taxable year.

Hefti’s move to delist some clients from the LTS group has been criticized by many large taxpayers.

Industry sources said being delisted from the group meant that they had to deal with revenue regions and settle their taxes along with the smaller taxpayers.

This, they said, took time and extra effort compared to the previous practice when they have one group focused on their needs.

The BIR, the government’s main revenue earner, is under pressure to meet collection goals. It is tasked to collect P845 billion for 2008 and P968 billion for this year.

Latest data from the government showed that the agency’s revenue shortfall swelled to P40.694 billion as of end-November 2008 as it collected P721.556 billion from January to November 2008 or P40.694 billion below the program of P762.250 billion for the period.

In November 2008 alone, the agency collected P76.745 billion, or P14.156 billion below the revenue goal for the month of P90.901 billion.