BIR overshoots June target by P3 billion

MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main revenue earner, collected P56 billion in June or P3 billion more than the target for the month of P53 billion, a ranking BIR official said yesterday.

The latest collection data is also P1.9 billion higher than the P54.1 billion generated in the same period last year.   

BIR deputy commissioner Nelson Aspe, citing preliminary data, attributed the higher-than-expected figures for the month of June to the agency’s Oplan Kandado program.

The program, launched in January, seeks to penalize business establishments that do not pay the right amount of taxes.

Under the program, business operations of non-compliant taxpayers will be suspended and their establishments temporarily closed if they are found to have violated certain tax laws.

Grounds for closure include failure to file a value-added tax (VAT) return, understating taxable sales or receipts by 30 percent more of the correct amount in the case of a VAT-registered taxpayer, or failure to register the business.

The closure of a business establishment shall last for at least five days and shall be in force until the taxpayer rectifies the violation. The order shall only be lifted by the BIR when there has been subsequent filing or amendment of returns with the payment of the tax as well as penalties.

As part of the program, the agency has temporarily shut down various establishments including three businesses in the island resort of Boracay in Aklan, La Suerte Grocery & Bakery in Magalang, Pampanga for failure to declare more than P50 million in income in 2008; Charmy Food Phils., Inc., a manufacturer of soybean products in Pasig City, for not declaring P40 million in sales for 2005 to 2008; and Arra’s Fine Dining, a Korean restaurant in Makati City for understatement of its taxable sales in 2008 by more than P20 million.

As of June 2009, the agency has already padlocked 40 establishments under the program.

The BIR has become aggressive with its Oplan Kandado program as it is under heavy pressure to meet its revised collection target for 2009 of P798.5 billion, adjusted downward from the previous program of P850 billion. For next year, the BIR is tasked to collect P875.1 billion.