BIR keeps close watch on corporate taxpayers

CEBU, Philippines — Businesses are on the tax agency's radar.

The Bureau of Internal Revenue in Cebu (BIR-13) is zooming in on the compliance of corporate taxpayers to offset the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law on its personal income tax collection.

TRAIN, which took effect January this year, cuts personal income taxes, paving way for higher take home pay among workers.

But this is significantly affecting the agency's tax collection, said Eduardo Pagulayan Jr., regional head at BIR-13, in a phone interview with The FREEMAN.

Income tax on workers' pay historically accounted for bulk of BIR's tax collection.

Pagulayan pointed out the TRAIN has affected about "60%" of the BIR-13's personal income tax take.

"That's why we're focusing on businesses to offset this impact," the tax official said.

He explained the workers' higher take home salaries are pumping more money into businesses as purchasing power rises.

Thus, the key is to ensure businesses are paying the right taxes, he said.

"We are close monitoring businesses," he said, noting that compliance has so far improved.

He, however, warned erring taxpayers the agency is willing to close down their operations if they're found evading from paying taxes.

As of the first half of 2018, BIR-13, which collects taxes in Cebu and Bohol, raked in P13.63 billion in taxes raked, falling short of its P14.76 billion tax goal for the period.

The bureau is yet to release official data for collection in the first nine months of 2018

BIR-13 is tasked to collect P31.3 billion this year.

Based on official data, it is set to collect this year P18.3 billion in personal income taxes; P9.4 billion in value-added tax (VAT); P11.6 million in excise taxes; P1.2 billion in percentage taxes; P2.5 billion in other taxes.

Last year, BIR-13 collected P27.59 billion, 6.11 percent short of its P29.38 billion target.