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CIDG posts breakthrough in case of slain BIR officer | The Manila Bulletin Newspaper Online

2011-04-23T15:04:00.000-07:00

CIDG posts breakthrough in case of slain BIR officer | The Manila Bulletin Newspaper Online

P500K for arrest of BIR exec’s killer

2011-03-12T04:03:00.000-08:00

Source: www.journal.com.ph

THE Bureau of Internal Revenue offered a P500,000 reward to anyone who can provide information that will lead to the capture of the killer of a revenue district officer who was shot dead last month.

Commissioner Kim Jacinto-Henares said that BIR officials and personnel had raised funds for the speedy resolution of the brutal killing of RDO Marcelino Yap.

However, the BIR chief clarified that the cash reward will only be given if the suspect is arrested alive.

Yap was about to enter the premises of his office in Marikina City on February 17 when a motorcycle-riding gunman shot him.

The owner of the motorcycle used in the crime has already been identified by Yap’s driver.

Police have launched a manhunt for the suspect.

“The amount we are giving may not be that considerable but we hope it will help in any way not only the family of our fallen colleague but also in the capture of the culprit,” Jacinto-Henares said.

She condemned the killing of Yap and expressed hope that his assailant will land in jail soon.

BIR sets deadline for taxpayers

2011-03-03T05:19:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines — The Bureau of Internal Revenue (BIR) Thursday required individual taxpayers receiving salary, or compensation income of P500,000 and more annually to file their 2010 income tax returns (ITRs) themselves which are due on or before April 15.

Under Revenue Regulations 2-2011, approved by Finance Secretary Cesar V. Purisima based on the recommendation of BIR Commissioner Kim S. Jacinto-Henares, the taxpayers were removed from the coverage of the substituted filing system (SFS) that requires employers to file the ITRs of their workers.

By next year, the BIR is planning to scrap SFS altogether to monitor closely tax payments from this source.

Revenue officials said the agency has been losing substantial amount of income taxes from salaried workers because tax withholding data submitted by employers were unreliable and inaccurate as they have no authority to audit the tax exemption claims of their workers.

In interviews, many taxpayers protested the new regulations, stating that the bureau did not hold public hearings or publicize the issue before imposing it.

They said the BIR should have delayed its implementation up to next year, considering that the deadline in the filing of 2010 ITRs is less than six weeks and that they have no more time to prepare the additional attachments. (Jun Ramirez)

BIR officer gunned down in Antipolo

2011-02-18T17:17:00.000-08:00

Source: www.manilastandardtoday.com

A REGIONAL district officer of the Bureau of Internal Revenue was gunned down in Antipolo City Thursday morning while on his way to his office, police said.

Marcelino Yap, 46, was ambushed and then shot dead around 8:45 p.m. in front of L/M Resto Bar while he was about to enter his office in the S&C Building on Marcos Highway in Mayamot village, Police Supt. Rodino Elfa said.

Witnesses said one of the suspects opened fire on Yap, hitting him in the head and body. Yap’s driver tried to ram the suspects’ motorcycle to stop their escape but failed.

Police found five empty shells from a .45 cal. Pistol, Yap’s wallet with cash in it, and his mobile cell phone on the crime scene.

Yap had been head of a district covering San Mateo, Marikina, Antipolo, Rizal and Teresa. He left behind his wife and six children.,

Chief Supt. Samuel Pagdilao Jr. told the Manila Standard that he had formed a task force to into the tax cases that Yap had been handling in case those had something to do with his killing.

Internal Revenue Commissioner Kim Henares said Yap was among the district officers who managed to deliver on the collection targets she had set.

“He did okay, so when I reshuffled all the revenue district officers early this year, he was not moved,” Henares said.

“The authorities are investigating whether what happened was of a personal nature or work-related.”

Yap’s staff described him as hard-working. He had been easy to work with, but strict when it came to tax administration, they said. Gigi Muñoz David and Elaine Ramos-Alanguilan

OPEN LETTER TO ALL BIR EMPLOYEES & THE TAXPAYING PUBLIC

2011-02-17T17:58:00.000-08:00

Source: BIR Taxpayer Information & Education Division (TIED)

WE, the officers and members of the BIR Employees Association (BIREA) and the Association of Chief Revenue Officers of the Philippines (ACROPHIL) condemn the senseless and cold-blooded killing of Revenue District Officer Marcelino Yap of RDO 45-Marikina City.

Without pointing an accusing finger at anybody and without speculating on the real motive of the killing, it is saddening, if not outright frightening. Mr. Yap is a very hard-working, no-nonsense and competent taxman who worked his way up the career ladder. His remarkable performance did not go unnoticed with his re-assignment to Marikina, Metro Manila all the way from Mindanao.

To our beloved taxpayers, while the burden of taxation is imposed upon you, as the taxman mandated to enforce the tax laws we take it upon ourselves to cushion its impact by providing efficient frontline service and fair, reasonable and just application of tax laws bearing in mind that we assess and collect the correct taxes.

Even with the demise of Mr. Yap we will continue to perform our mandate as taxmen. Our only request now is for police authorities to solve this case and bring the perpetrator/s of this senseless crime to the bar of justice. This may not bring back the life that was lost but will somehow alleviate the pain and suffering of the bereaved family.

To our fallen comrade Marcelino Yap, wherever you are, we in the BIR will work even harder with courage and commitment so that your death will not be in vain. We will not be cowed by any similar dastard act in the enforcement of tax laws and risk our limbs or lives in the discharge of our solemn duties – all in the name of service, honor and love of country.

To the bereaved family, relatives and friends of Marcelino Yap, we offer our heartfelt condolences.

All the men and women of the entire revenue service join you in prayers to our Almighty God for the eternal repose of the soul of our dear Revenue District Officer Marcelino Yap.

BUREAU OF INTERNAL REVENUE EMPLOYEES ASSOCIATION (BIREA)

ASSOCIATION OF CHIEF REVENUE OFFICERS OF THE PHILIPPINES (ACROPHIL)

17 February 2011

Revision of 2011 growth target nixed

2011-02-07T07:40:00.000-08:00

Source: www.sunstar.com.ph

THE country's chief planning agency said it is too early to recommend changes in this year's economic growth projections despite the higher-than-expected performance of the economy in 2010.

This came as Socioeconomic Planning Secretary Cayetano Paderanga Jr. admitted that factors that heavily contributed to the 7.3 percent uptick experienced last year were no longer present.

These include election-related spending and heavy government expenses made to offset the effects of global financial crisis.

"It would be easier to attain the 2010 target than the 2011 target but we have not given up on that," Paderanga said.

However, he said the effect of the government's reforms such as in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) would come in "sooner rather than later."

Economic managers are yet to decide whether to revise the outlook for 2011, which assumed an economic growth of between seven and eight percent.

Last year's economic growth was the highest in 34 years since the 8.8 percent expansion recorded in 1976.

The economy, as measured by the gross domestic product (GDP), was fueled also by a strong fourth quarter growth that hit 7.1 percent or higher than the revised third quarter growth of 6.3 percent.

GDP is the sum of all goods and services produced by the economy in a given period.

Eastern Samar Representative Ben Evardone said the fruits of strong economic performance should trickle down to the poor, as he credited the present administration's "sound economic policies."

"The 7.3-percent economic growth of the country last year should trickle down to the ordinary people. Unless this figure is translated into actual job opportunities and food on the table of every Filipino family, this would mean nothing to them," he said.

Seasonally adjusted GDP grew three percent last year following a contraction of 0.8 in the previous quarter, while seasonally adjusted gross national product (GNP) accelerated to 2.9 percent from the 0.2 percent growth in the third quarter of 2010.

With this, per capita GDP or GDP per person rose by 5.3 percent in 2010 from a decline of 0.9 percent in 2009.

"Those rosy figures are nothing if we are not able to sustain them and if these are not translated into actual opportunities for our people," Evardone said.

Paderanga said risks to growth remain, such as the movement of commodity prices, particularly oil and minerals, and the disturbances in the global economy.

Evardone, meanwhile, said pump-priming activities during the first quarter of the year, billions in cash assistance to the "poorest of the poor" households and public-private partnership projects that would generate thousands of jobs could further strengthen the economy.

Last week, Dutch-owned ING Bank N.V. expressed confidence that the Aquino administration will record the highest average economic growth since 1986, which is at 5.3 percent from 2010-2016. (Virgil Lopez/Sunnex)

Sharing information for tax collection

2011-02-07T07:25:00.000-08:00

Source: www.bworldonline.com

As technology advances, sharing information has never been easier.

File-sharing Web sites abound, allowing users to access and manipulate software, music files, photos and other forms of data. Popular social Web sites allow users to share information in ways incomprehensible just a decade ago.

Sharing information is a phenomenon that benefits both the general public and the government. While a shared information system keeps one updated on news, trends and events, government agencies are using this system to effectively exercise greater vigilance, collaboration and open information exchange, in the pursuit of efficiency. One clear example is the initiative to raise tax revenues, notably by concentrating efforts on taxpayers who refuse to pay the right taxes.

The Bureau of Internal Revenue (BIR)’s Reconciliation for Listing and Enforcement (RELIEF) System and Integrated Tax System (ITS) have worked wonders for the bureau. The BIR is able to generate data that could, at the very least, indicate possible sales under-declarations made by taxpayers on a third -- party matching basis.

The BIR’s matching system is fairly simple: the bureau compares the declarations of the supplier and the customer, looking at their respective income, value-added tax, withholding tax and other tax returns. For example, if a supplier’s reported sales to a purchaser is less than that purchaser’s reported purchases from that supplier, the purchaser will be asked to explain the seemingly over-declared purchases. If the purchaser manages to prove the correctness of the amount of his purchases, then the BIR now has significant evidence to go after the supplier. Of course, this could go the other way if the supplier involuntarily shares information with the BIR that can be used to pursue the purchaser. This becomes a matter of inadvertently pointing a finger at the erring party.

The BIR issues a Letter Notice (LN) based on under-declarations discovered through the RELIEF and ITS. This LN is the basis of authority for the BIR to assess a taxpayer. The LN is equivalent to the Letter of Authority (LoA), and its issuance prevents a taxpayer from amending his returns covered by the said LN.

What sets the LN apart from the LoA is that the former is an issue-based assessment. This means that the investigation will cover only specific discrepancies discovered under the third-party information matching system.

This is the reason why, even after the settlement of any valid assessment for deficiency taxes listed in the LN, the BIR is not precluded from issuing an LoA covering all internal taxes to the same taxpayer for the same year as that of the LN.

Neither is the BIR limited to nor by the information obtained from its own system. The BIR acquires information from other government agencies to verify relevant information such as a taxpayer’s costs and volume of production, receipts or sales and gross incomes of a taxpayer, as well as the names, addresses and financial statements of corporations, mutual fund companies, insurance companies, regional operating headquarters of multinational companies, joint accounts, associations, joint ventures or consortia and registered partnerships, and their members.

The power of the BIR to access this information is provided for under Section 5 of the Tax Code, wherein the BIR Commissioner may regularly obtain from any office or officer of the national government or local government units, government agencies and its instrumentalities, including the Bangko Sentral ng Pilipinas and government-owned and -controlled corporations, any information relevant to ascertaining the correctness of any return; or even if no return is made, in determining the liability of any person for any internal revenue tax, in the collection of any such liability or in evaluating tax compliance.

Of late, the BIR has been increasing its information-sharing activities with various agencies, such as the Bureau of Customs, Land Registration Authority, Insurance Commission and the Land Transportation Office. This means that any information that may have been provided to these or other government agencies, intentionally or inadvertently, will be accessible to the BIR and may result in the issuance of an LN (or LoA, as the case may be) when certain discrepancies are identified in the said information accessed and the declarations made in tax returns filed.

LN verification is a form of no-contract audit but taxpayers must not take it lightly. Under existing BIR rules, if the discrepancy stated in the LN is at least 30% and the taxpayer fails to contest the same, the BIR may institute closure proceedings according to the policies and procedures prescribed under Revenue Memorandum Order 31-2002.

Furthermore, the BIR recently obtained P400 million under the "e-Government Fund" to establish the Assets Information Management Program (AIM-P), which will be utilized initially as a system to check the information being shared among the said government agencies against the information already obtained by the BIR under the one-time amnesty program conducted in 2007. The AIM-P will then be used to provide a system for the BIR to easily evaluate (and compare) a taxpayer’s income payments, based on the number and value of the taxpayer’s assets currently registered with other government agencies.

With the new administration’s emphasis on increased transparency and accountability, there is greater focus in government to raise tax revenue collection without having to impose new taxes. And the key to this goal is information.

As responsible taxpayers, we must take steps to be consistent and truthful in our income reporting and -- for our own protection -- check if the people we deal with are doing the same.

Governors’ League Opposes BIR Tax

2011-02-04T05:12:00.000-08:00

Source: www.ndb-online.com

The League of Provinces in the Philippines, the organization of governors around the country, is strongly opposing the Bureau of Internal Revenue (BIR) in its move to tax the economic enterprises of the local government units, Governor Alfredo Marañon Jr. said yesterday.

Marañon said the governors discussed yesterday the BIR issue, which he raised before the group, during their meeting in Manila.

He explained that although he was not around at the meeting yesterday, he had informed the other governors about it. Marañon had to fly back to Bacolod yesterday morning for a meeting with former Senator Mar Roxas on important thrusts of his administration.

Marañon said the governors are unanimous in their decision not to pay any tax to the BIR. He said that the consensus of the group is that their proprietary activities should not be taxed, as it is not a private enterprise.

Last week, Marañon had a dialog with BIR Revenue Region 12 Diretor Araceli Francisco at the Provincial Capitol. Francisco had presented to him and the provincial government officials taxation of local government proprietary functions.

But Marañon stood firm in his decision not to pay income taxes and said in jest that if the BIR insists, he will take the matter to the Supreme Court.

Francisco, when interviewed after the dialog, said, "Well, it’s a free country. He is entitled to that."

"We only collect taxes if it’s a profit, if it’s not we don’t collect anything. When we do an audit, it’s not primarily to collect tax, but to check whether they’re keeping the books accordingly," she added.

In November last year, Francisco wrote to Marañon that the agency is mandated to advise all local government units of the taxability of its proprietary activities.

She added in the letter that the Negros Occidental provincial government should register its proprietary activities, file prescribed invoicing requirements, and pay corresponding taxes due hereon.

The economic enterprises of the Capitol are the Mambukal Resort, its provincial and district hospitals, Sweet City Captel, Panaad Park and Stadium, multi-purpose gym and pala-pala.

Provincial Legal Officer Jose Ma. Valencia earlier said the Local Government Code states that LGUs are encouraged to raise revenues on their own so they will not be Internal Revenue Allotment-dependent, and the funds should be use exclusively for the disposition of LGU services to their constituents and not for taxes.*

CPAs back BIR in drive vs tax evasion

2011-01-19T07:31:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines – Certified public accountants (CPA) from all over the country agreed Wednesday help the Bureau of Internal Revenue (BIR) in curbing the incidence of tax evasion which problem has been causing the government to lose billions of pesos in taxes annually.

Officers and members of various CPA organizations like the Philippine Institute of Certified Public Accountants and the Tax Management Associations made the pledge when they attended a forum organized by BIR to discuss the salient points of a new Revenue Regulations 15-2010 requiring them to make full disclosure of the financial statements of their clients and submission of previously not required documents.

They said they are willing to assist the BIR in collecting the correct taxes by presenting accurate financial statements of their individual and corporate clients.

They appealed, however, to delay the implementation of the said regulations to enable them to comply fully with its detailed and tedious requirements.

According to the CPAs they have no more time to comply with the presentation of additional papers as the April 15 deadline in the submission of 2010 income tax returns nears.

Anyway, they said the BIR has already the records it sought, including importation of documents from the Bureau of Customs as well as in the monthly and quarterly value-added-tax (VAT) reports.

They said many of them have already reviewed and signed the 2010 financial reports of their clients in time for the April 15 deadline.

Among the new requirements requested by the BIR are schedule of taxes and license paid during the taxable year, the detailed amount of VAT output tax (expenses) declared and amount of VAT input taxes (deduction) claimed.

Gov't keeps 2011 budget deficit ceiling unchanged

2011-01-18T14:12:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines — Finance Secretary Cesar V. Purisima said Monday that the national government will keep its programmed P290-billion budget deficit for this year despite the lower than expected financing gap in 2010.

Purisima said in an interview with reporters that he is confident that the government will meet this year’s budget shortfall, which is equivalent to 3.2 percent of the country’s output or gross domestic product (GDP).

“I believe in the coming years will be within the targets and we’re sticking to our targets,” Purisima said when asked on the possible revision on the governments fiscal assumptions due to improved 2010 budget gap.

Purisima also said that the revenue collections at the government’s two main tax agencies, the Bureau of Internal Revenue and Bureau of Customs, rose at a faster pace than the country’s GDP last year.

The finance department is expected report the country’s fiscal performance for 2010 next month.

But Finance Undersecretary Gil S. Beltran earlier said the Aquino administration may have ended 2010 with more than P5 billion below the P325 billion budget deficit ceiling.

Beltran attributed the below programmed budget deficit on improved revenue performance.

Budget and Management Secretary Florencio B. Abad had said the government’s spending last month was at a reasonable level, adding the total spending in December may help the government to end the year with a lower than the P325 billion budget deficit ceiling.

In January to November 2010, the government’s budget deficit stood at P269.8 billion, which was way below by P55.2 billion compared with the full-year budget gap program.

In November, the government had managed to register a small budget surplus of P482 million as revenue climbed by 15.8 percent to P111.5 billion while spending rose following a decline in October.

Abad earlier said the government has enough spending room last month after the surplus in November.

But he said the government will keep its 2010 record budget deficit ceiling, which is equivalent to 3.9 percent of GDP.

Several economists have already projected that the government may end the year with a lower than programmed budget gap after the Aquino administration implemented its “austerity measures.”

President Benigno Aquino’s administration plans to increase revenue and spending this year as it seeks investments in roads, bridges and railways to develop an economy where the World Bank estimates one in every four lives on less than $1.25 a day.

Internal Revenue bureau trains sights on flea markets anew

2011-01-18T14:08:00.000-08:00

Source: www.bworldonline.com

THE BUREAU of Internal Revenue (BIR) has ordered its revenue district offices (RDOs) nationwide anew to check if businesses in tiangges, or flea markets, are registered with the agency and issue official receipts, a memorandum posted on the bureau’s Web site said.

This, in turn, will enable the bureau to track their sales to determine if correct taxes have been paid.

"In line with the continuing campaign for the issuance of receipts...leading towards the payment of correct taxes...[RDOs] are hereby directed to include among your high priority activities starting this month the conduct of Tax Compliance Verification Drive (TCVD)," Memorandum No. 11-01-001 read.

"Concentration [should be] on establishments operating as tiangges or flea markets, bazaars and similar establishments," the memorandum, dated Jan. 13, added.

It said target establishments will include "but will not be limited" to establishments at the 168 Mall and Tutuban Mall in the City of Manila, Green Hills Shopping Center in the City of San Juan, as well as those operating in Baclaran in Parañaque City.

TCVD or tax mapping started in 2003 through Revenue Memorandum Order 31-2003. It involves unannounced, random visits by BIR revenue district teams to business establishments in order to check if they follow regulations in issuing receipts and bookkeeping, among others.

"...Violations shall be dealt with through the remedies available under the law such as, but not limited to the imposition of penalty fees, implementation of the Oplan Kandado program...and/or filing of criminal cases under the RATE (Run After Tax Evaders) program, as may be warranted," the memorandum said.

The Oplan Kandado program padlocks establishments found to have been violating tax laws, while RATE involves the filing of tax evasion cases.

BIR Deputy Commissioner Nelson M. Aspe said in a phone interview over the weekend that tax mapping had "not been given enough attention" by some revenue districts because of "other work that needs to be done."

He did not elaborate, but said the memorandum should make TCVD a "regular monitoring" operation by RDOs, noting that "some business owners that do not have permits" tend to "return" to their stalls when BIR visits cease.

"This is to remind revenue officers that they need to monitor these places (flea markets) more often. This is not a crackdown or a new program. This is a continuing program," Mr. Aspe explained.

The official said most flea market stalls earn a "minimum of P5,000 daily," translating to an annual income of "more than P1.5 million," which is "enough for them to be VAT (value-added tax) registrants" under the National Internal Revenue Code of 1997.

He declined to give estimates as to how much the BIR hopes to earn from the renewed drive, nor when it will begin.

It will be recalled that the BIR conducted in late-2009 the program, called "SanTAX Claus", to check on tiangges during the Christmas holdays.

Sought for comment, Joey Santos, general manager of Ortigas and Co. that operates Green Hills Shopping Center, said the over 1,000 stalls in the flea market here are "complete with all permits to operate."

"We have no problem with it (tax mapping). They (BIR) already did that before and we already complied. All our stores have permits," Mr. Santos said by phone.

Officials from Tutuban Mall and 168 Mall in Divisoria could not be reached for comment.

BIR, which accounts for about 70% of tax revenues, has already admitted it would fail to meet its P860.4-billion target last year, with an agency official having said that the bureau fell short of its P73.78-billion December goal by "more than P1 billion." This, in turn, brought BIR’s total collections last year to around P826 billion. Final December and 2010 figures are scheduled to be released today.

BIR set to revise MVS

2011-01-05T02:19:00.001-08:00

Source: www.mb.com.ph

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is revising its mission and vision statements (MVS) in support of President Aquino’s pronouncements and agenda to underscore its job as the foremost tax collection arm of the government.

In a memorandum, Revenue Commissioner Kim S. Jacinto-Henares instructed all regional directors and heads of various offices nationwide to compose and submit to her the new slogans highlighting the mandate of the BIR which collects roughly 70 percent of the annual total income of the government.

Last year, the BIR was tasked to raise P860 billion by higher fiscal authorities.

The BIR chief said the new MVS must be clear and concise, expressing the "hopes and dreams of every revenuer as a public servant and as a Filipino."

She said the mission statement must not only focus on the collection of internal revenue taxes but must emphasize the BIR's role in nation building.

She said the vision articulation must reflect the current strategic direction of the BIR including the fair implementation of tax laws, transparency and simplification of processes to enhance compliance. (Jun Ramirez)

Of tax disclosures and financial standards

2011-01-03T05:15:00.000-08:00

Source: www.bworldonline.com

Suits The C-Suite -- By Henry M. Tan

2010 was a year of many changes, challenges and opportunities. Everyone, it seems, has been buoyed by a sense of hope and optimism that the country is treading a new path to prosperity.

Fueling the government’s plans, however, will require financial vitality -- which puts pressure on the government’s primary revenue collection agencies such as the Bureau of Internal Revenue (BIR) and the Bureau of Customs.

Faced with the task of collecting P860 billion in 2010 and P940 billion this year, the BIR had initiated several measures to meet its collection target.

One such measure is the mandate to BIR examiners to be more vigilant and critical in their review of audited financial statements and tax returns.

Another measure is the requirement of more stringent reporting. Believing that the disclosures currently required under Philippine Financial Reporting Standards (PFRS) could still be improved in order to reflect the information needed by examiners in conducting their office audits and examinations, the Department of Finance issued Revenue Regulations (RR) No. 15-2010 which, in addition to the disclosures already required under the PFRS and other standards and conventions, require that the Notes to Financial Statements shall include information on taxes, duties and license fees paid or accrued during the taxable year, particularly the following:

1. the amount of Value-Added Tax (VAT) output tax declared during the year, as well as the account title and amounts upon which the same was based. If there are zero-rated and/or exempt sales and receipts, a statement to that effect and the legal basis therefore;

2. the amount of VAT input taxes claimed broken down into:

a. beginning of the year;
b. current year’s domestic purchases and payments for:
- i. goods for resale, manufacture or further processing;
- ii. goods other than for resale or manufacture;
- iii. capital goods subject to amortization;
- iv. capital goods not subject to amortization;
- v. services lodged under cost of goods sold; and
- vi. services lodged under other accounts.
c. claims for tax credit/refund and other adjustments; and
d. balance at the end of the year.

3. the landed cost of imports and the amount of customs duties and tariff fees paid or accrued thereon;

4. the amount of excise taxes, classified per major product category, paid on locally produced excisable items and imported excisable items;

5. documentary stamp tax on loan instruments, shares of stock and other transactions subject thereto;

6. all other taxes, local and national, including real estate taxes, license and permit fees lodged under the Taxes and Licenses account, both under the Cost of Sales and Operating Expense accounts;

7. the amount of withholding taxes categorized into:

a. tax on compensation and benefits;
b. creditable withholding tax; and
c. final withholding tax.

8. periods covered and the amounts of deficiency tax assessments, whether protested or not; as well as

9. tax cases and the amounts involved that are under preliminary investigation, litigation and/or prosecution in courts or bodies outside the BIR.

This additional requirement has immediately generated concern and questions among taxpayers and external auditors. Certainly, more guidance and clarification will be needed if companies and auditors are to be able to fully comply.

For instance, the RR requires disclosure of tax assessments and cases, regardless of the probability of these resulting in an actual outflow of resources from the taxpayer. This is not consistent with the accounting standards that require disclosure only if it is probable that the tax assessments/cases will materialize.

Neither is it clear whether the deficiency tax assessments that should be disclosed include all assessments, whether informal, preliminary or final assessments.

Moreover, will the BIR permit the inclusion of a statement regarding the taxpayer’s position on these tax assessments, as well as an evaluation of its merits? Will the BIR allow the taxpayer to indicate whether the tax assessments were protested?

The RR also requires disclosure of the amount of output tax declared in the VAT declarations and returns, and the amounts upon which the same was based. In the case of sale of services, output VAT is based on gross receipts and not on gross sales, which is the amount reported in the audited financial statements. Thus, the balance of the pertinent sales account will not necessarily be the same as the gross receipts used as basis for the output tax declared in the VAT declarations and returns. This disclosure requirement will have to be modified for sellers of services.

Another item that needs clarification is whether there is a need to differentiate the disclosure required under the RR from those required by the PFRS. Would the taxpayer be allowed to present the RR-required information in a separate unaudited schedule that will be filed together with the basic financial statements required under PFRS?

RR No. 15-2010 was published on Dec. 13, 2010 in a newspaper of general publication, and therefore took effect last Dec. 28, 2010.

Given the various concerns and queries on the information required under RR No. 15-2010, we hope the BIR will clarify these concerns and, accordingly, enhance compliance by taxpayers and external auditors.

De Lima airs view on tax exemptions

2011-01-01T12:50:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines — The question of validity and the constitutionality of the Bureau of Internal Revenue (BIR) subjecting Philippine Amusement and Gaming Corporation (PAGCOR) to value-added tax and its removal from the list of the government-controlled and owned corporations exempted from income tax is subject to the interpretation of the Supreme Court (SC), Justice Secretary Leila de Lima said.

De Lima declined to give legal opinion to PAGCOR Chairman Cristino Naguiat Jr. on the proper interpretation of the various tax laws affecting the PAGCOR, particularly relative to the tax exemption of PAGCOR.

The matters, De Lima, stressed is now pending before the SC. “By settled policy and practice, the Secretary of Justice does not render opinion or give legal advice on matters which are sub-judice or pending litigation in court,” she said.

She said: “To rule on the query would be unwarranted intrusion into the exercise of the judicial powers and functions pertaining to SC or a separate and coordinate branch of government and could subject this Office to criticism for violation of the independence of the judiciary.”

The PAGCOR has pending petition for certiorari with the SC, specifically questioning PAGCOR’s unceremonious omission or removal from the list of GOCC’s exempted from income tax as provided by R.A. No. 9337, and BIR Issuance (RR No. 16-2005) subjecting PAGCOR to VAT.

Report on time, BIR men told

2010-12-29T15:39:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines – No more hanging around for the majority of officials of the Bureau of Internal Revenue (BIR) assigned all over the country starting next year.

Revenue Commissioner Kim S. Jacinto-Henares has required them "to personally punch in their respective bundy clocks at the prescribed time-in and time-out periods."

The bundy cards shall be signed by the employee and their immediate supervisor at the end of each month.

Ms. Henares came out with Revenue Memorandum Order No. 87-2010 to encourage all personnel to report on time and serve the taxpaying public promptly.

Exempted from the daily chores are the commissioner, deputy commissioners, head revenue executive assistants, regional directors, assistant regional directors, and revenue district officers.

The rest including division chiefs and assistant district officers are required to sign in and out. (Jun Ramirez)

Improving Philippine competitiveness

2010-12-26T15:15:00.000-08:00

Source: www.bworldonline.com

As the year comes to a close, we are hopeful that the Philippines will fare better in terms of world competitiveness in 2011.

In the 2010 World Competitiveness Yearbook (published by the International Institute for Management Development) the Philippines ranked 39th out of 58 economies surveyed, up from rank 43rd out of 57 in 2009. This ranking was based on four competitiveness factors: economic performance, government efficiency, business efficiency and infrastructure.

Of some concern is our ranking 56th out of 58 economies in areas such as education, basic and scientific infrastructure and international investments. With the positive energy and upbeat outlook resulting from the national elections in May, we are hopeful that this ranking will improve sooner than later.

In fact, the new administration has already begun encouraging international investment by way of economic programs such as public-private partnerships (PPPs), as well as adopting international standards on exchange of information. While government has already promised to promote investments via easier access to loans, faster processing of permits and the guarantee of protection from regulatory risks (as revealed last November in the new PPP plan), another area for improving our country’s economic attractiveness is in the area of taxes -- more specifically, the enforcement of preferential tax treatments under existing tax treaties.

While it is true that taxes are an inescapable part of the cost of doing business anywhere in the world, many multinational companies are drawn to countries with tax treaties that can help reduce or eliminate the effects of double taxation. Tax treaties can cushion the impact of taxes on business operations by prescribing lower rates for certain types of income that are also taxed in another country, or by exempting certain types of income, or crediting the tax paid in a particular country against the tax payable in another country.

In Southeast Asia, the Philippines has a relatively small treaty network, with bilateral agreements entered into with only 37 countries, compared with those of Singapore (61), Malaysia (68) and Indonesia (57). Perhaps another way to support the PPP program is to expedite expansion of this treaty network. However, while it is always good to have a large number of treaty partners, the tax treaties are only beneficial and relevant when they are properly implemented by the parties to the agreement.

In 1986, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 2-86, prescribing the procedure for processing and verifying tax treaty relief applications (TTRAs) in order to prevent the erroneous interpretation and application of treaty provisions. This was followed by RMO Nos. 10-92 and 1-00.

These RMOs gave rise to the question of whether it is mandatory to file a TTRA and secure BIR approval before one can enjoy the benefits of the treaty. On the one hand, it was argued that such filing and prior approval is not necessary because treaties fall within the constitutional provision that makes international agreements part of the law of the land. The proponents of this view argue that a tax treaty is self-executory and does not need prior confirmation from a government administrative agency (such as the BIR) before one can avail of its benefits.

On the other hand, the other argument is that the requirement to file a TTRA and secure prior BIR approval is in line with the objective of ensuring that treaty benefits are enjoyed only by those who are duly entitled to them, as in the case of some Supreme Court decisions that required prior application before the benefits of tax treaties could be availed of.

The recently-issued RMO No. 72-2010 provides the final resolution to this question. RMO No. 72-2010 makes it mandatory to file TTRAs before the transaction. For this purpose, the term "transaction" shall mean the occurrence of the first taxable event. The new issuance clearly states that failure to file the TTRA before the transaction shall have the effect of "disqualifying the TTRA."

The RMO designates the International Tax Affairs Division (ITAD) as the sole office charged with receiving and processing the TTRA. All rulings relative to the application, implementation and interpretation of the tax treaty provisions shall also emanate from the ITAD. It also prescribes a deadline for the processing of TTRAs, which is within 60 working days from date of receipt of the TTRA or the date of receipt of complete documentary requirements by the ITAD, whichever comes later. On matters involving income characterization, the processing period is shortened to 30 working days. Rulings on the TTRAs shall be signed by the Assistant Commissioner for the Legal Services and/or the Deputy Commissioner for Legal and Inspection Group. Rulings of first impression, or any ruling which will reverse, revoke or modify any existing ruling, will be signed by the Commissioner of Internal Revenue. The remedy for an adverse decision by the BIR on the TTRA is a request for reconsideration, not with the BIR, but with the Department of Finance within 30 days from receipt of the ruling.

There is no doubt that RMO No. 72-2010 significantly clarifies the process for TTRAs, and the time line prescribed for acting on TTRAs gives cause for optimism for speedy resolutions. However, TTRAs filed before the effectivity of RMO No. 72-2010 should not fall by the wayside and should benefit as well from the time line accorded to TTRAs filed after the effectivity of the new RMO.

The year 2011 brings with it new optimism. With the current atmosphere of renewed hope, now is as good a time as any to streamline our tax treaty arrangements and, more importantly, enable the treaties to provide true relief as a way of further stimulating foreign investor interest in the government’s economic programs.

BIR to expand reach of large taxpayers’ net

2010-12-26T03:43:00.000-08:00

By Elaine R. Alanguilan

Source: www.manilastandardtoday.com

INTERNAL Revenue plans to expand its coverage of the large taxpayers to collect about P610 billion from this segment out of its P940-billion tax collection target next year.

Commissioner Kim Henares said the move was meant to boost the agency’s collection and to make the tax bureau at par with its counterparts abroad.

“It is the best practice all over the world to put all large taxpayers in one unit so you can monitor them and provide them the service that they need,” Henares told the Manila Standard.

The large taxpayers include the top 1,000 corporations, but it wasn’t clear what criteria Internal Revenue will use to add to the roster.

The agency considers a taxpayer large if it complies with the following criteria:

• It has a net value-added tax or payable of at least P200,000 per quarter for the preceding year

• It has an annual income, excise, withholding and documentary stamp taxes paid or payable of at least P1 million for the preceding year

• It has P200,000 in percentage taxes paid or payable per quarter for the preceding year

• Its gross sales or receipts for the preceding year should have been at least P1 billion

• Its total net worth should be at least P800 million at the close of each calendar or fiscal year

• Its total annual gross purchases for the preceding year should have been at least P800 million

• It should be among the top corporate taxpayers as listed and published by the Securities and Exchange Commission.

Henares said compliance from the large taxpayers had not been a problem, but they had more sophisticated needs and administering to them was more complicated compared with the individual taxpayers.

The large taxpayers are subject to stricter monitoring, compelled to bear the heavier burden of reporting, given greater responsibility as withholding agents, and used to pilot-test certain systems development.

Internal Revenue collects over 60 percent of its taxes each year from the large taxpayers, which totaled 1,376 in 2009. This segment paid P439 billion in taxes last year.

Henares said her agency’s evaluation of the large taxpayer segment was ongoing, and that they would only know how many more taxpayers would qualify to join it next year. The large taxpayers include the top 1,000 corporations in the country.

“It depends on the number of people that we can get to man the large taxpayer system,” Henares said.

“We have 300 personnel in the agency that takes care of the large taxpayers, and we want to expand it further. However, this is a function of the budget that we get each year from the national government.

“We’re always making sure that the people manning the large taxpayer service are better trained than usual, and are equipped to handle the needs of those among the country’s largest taxpayers.”

BIR Modifies Requirements in the Submission of Financial Statements

2010-12-20T14:43:00.000-08:00

Source: www.gov.ph

Quezon City — The BIR Issued Revenue Regulations (RR) No. 15-2010 last December 13, 2010 prescribing additional requirements in the submission of Financial Statements by individual and corporate taxpayers, thereby amending Section 2 of RR No. 21-2002.

The regulations now requires taxpayers to include information on taxes, duties, and license fees paid or accrued during the taxable year in addition to the disclosures mandated under the Philippine Financial Reporting Standards.

Taxpayers must now disclose information on the amount of VAT output tax declared during the year and the account title and amount upon which the same was based.

Information on the amount of VAT Input taxes claimed beginning of the year as well the current year’s domestic purchases and payments for goods for resale/manufacture or further processing, goods other than for resale or manufacture, capital goods subject or not subject to amortization and services lodged under cost of goods sold and other accounts must be also indicated. It must also include claims for tax credit/refund and other adjustments and balance at the end of the year.

For businesses involving importation of goods, information on the landed cost of imports and the amount of customs duties and tariff fees paid or accrued thereon must be reported. Also the amount of excise tax classified per major product category, i.e., tobacco and alcohol products, automobiles, minerals, oil, and petroleum paid on locally produced and imported excisable items must be incorporated in the report.

Information on documentary stamp tax (DST) on loan instruments, shares of stock and other transactions subject thereto as well as all other taxes, local and national, including real estate taxes, license and permit fees lodged under the taxes and Licences account both under the cost of sales and operating expense accounts must be declared for One-Time-Transactions.

For withholding taxes, information must include tax on compensation and benefits, creditable withholding taxes and final withholding taxes.

In cases where there is deficiency tax assessment whether protested or not, the periods covered and amount involved must be disclosed. Also tax cases under preliminary investigation, litigation and prosecution in courts or bodies outside the bureau, including amounts involved must be part of the information disclosed.

Implementation of these regulations takes effect immediately fifteen (15) days upon publication.

dof.gov.ph

bir.gov.ph

BIR to reshuffle data encoders after errors in taxpayers’ list

2010-12-19T04:04:00.000-08:00

Source: www.gmanews.tv/

The Bureau of Internal Revenue (BIR) will reshuffle its data encoders after errors were discovered in the list of top taxpayers for 2009 released last week.

BIR Commissioner Kim Henares cited the mistake as “human error," saying the agency would do more verification for future lists.

“We will eliminate encoding so we will capture the data," Henares said this weekend, referring to the use of the copy-paste system instead of the manual entry of data on the list.

Encoders rounded-off the income data of individual taxpayers Rosabelle Bandong, an associate director of a production company, and lawyer Francis Carlo Taparan, which placed the two on the country’s top taxpayers list for 2009, the BIR said.

According to the list the bureau initially published last week, Bandong paid P57.8 million in taxes. However, she actually paid only around P57,000.

Taparan was also erroneously listed as having paid P38.7 million when he actually paid only around P38,000.

The lawyer had complained with the BIR about the erroneous data, prompting Henares to make a public apology for the blunder.

From now on the agency would ensure only correct data would be encoded on the tax payer’s list, the BIR chief said.

Such mistakes do not happen in actual assessments and tax payments, the numbers of which are verified and checked by at least four people who revert to the original data and not just the submitted forms, she clarified.

The BIR had since corrected the list, removing Bandong and Taparan from it.

Partial list of top tax payers

A partial list of bureau’s 2009 top taxpayers include:

Elaine Gardional, DPWH contractor (P59 million)
Ramon Ang, SMC president (P26.4 million)
Oscar Lopez, First Philippine Holdings chairman (P25.7 million)
Henry Sy Sr., SM Prime chairman (P25.18 million)
Manuel Lopez, former Meralco chairman (P19.32 million)
Manuel Pangilinan, PLDT chairman (P19.28 million)
Lucio Tan, Fortune Tobacco, PAL (P9.23 million)
Eugenio Lopez III, ABS-CBN chairman (P5.15 million)

Among the celebrities who paid their dues to the government include:

Willie Revillame (P57 million)
Sharon Cuneta (P19.55 million)
Kris Aquino (P12.79 million)
Piolo Pascual (P11.51 million)
Marian Rivera (P10.12 million)
John Lloyd Cruz (P8.59 million)
Judy Ann Santos (P8.2 million)
Manny Pacquiao (P7 million)
Vic Sotto (P6.2 million)
Sarah Geronimo (P4.8 million)

Boxing icon Manny Pacquiao was the toptaxpayer in 2008 whose 10-percent tax totaled P125 million. Last year Pacquiao payed only P7 million, according to the BIR.

The Top 10 corporate taxpayers include:

Smart Communications (P10.2 billion)
Globe Telecom (P5.49 billion)
Chevron Malampaya (P4.19 billion)
San Miguel Brewery (P3.58 billion)
Nestle Philippines (P3.55 billion)
PLDT (P3.53 billion)
Pilipinas Shell (P3.24 billion)
Meralco (P2.79 billion)
Fortune Tobacco (P1.88 billion)
SM (P1.82 billion)

The government tasked the bureau to collect P860 billion this year, but Henares conceded that that was too high. She said the original collection target of P830 billion was a more “doable target." — VS, GMANews.TV

House to monitor BIR moves on strip stamp

2010-12-13T14:28:00.000-08:00

Source: www.malaya.com.ph

The House committee on ways and means will be closely monitoring how the Bureau of Internal Revenue (BIR) will choose the most cost-efficient tax stamp technology provider through its planned open public bidding.

Batangas Rep. Hermilando Mandanas, committee chairman, said over the weekend the BIR has promised the House panel of continued updates and specifics on the status of its planned public bidding for the tax stamp project for cigarettes.

Mandanas said he has tasked oversight subcommittee chair Isabela Rep. Giorgidi Aggabao to receive and submit a report on the BIR’s updates.

He said the oversight subcommittee would also monitor if provisions of the general procurement law are complied with.

"The subcommittee will be getting reports from the BIR on updates or developments of the agency’s plan to offer the tax stamp project through public bidding. This is part of the subcommittee’s oversight function," Mandanas said.

Mandanas said the subcommittee can also seek further clarification from the BIR on its decision to junk the SICPA tax stamp proposal.

Last week, BIR Assistant Commissioner James Roldan informed the committee about the agency’s decision to junk the controversial SICPA tax stamp proposal whose proponents had planned to implement through the Build-Operate-Transfer law.

Roldan said the position of BIR at present is not to cater to any particular company anymore since any monitoring scheme on cigarette excise tax revenue shall now be pursued through public bidding under the general procurement law.

"The BIR will instead provide for another system through public bidding. The SICPA project will no longer be pursued," he said.

Roldan further said if the bidding process under the general procurement law will push through, all bid proposals will have to be assessed based on the terms and reference of the project scheme which the BIR will formulate. He said there will be no more unsolicited proposals.

Mandanas said as explained by the BIR, the shelving of the unsolicited SICPA tax stamp proposal means there will definitely be no more negotiations with the Switzerland-based company.

"The negotiations are over," he said.

Mandanas said it is up to the BIR to make its own judgment if the agency’s public bidding option will hurdle legal challenge in case questions will be raised against it in the court.

"It’s up to the BIR to bring it up or not before the SC, it’s their move. We won’t interpose any objection to their process," he said.

Mandanas said it will be up to the court to decide if the tax stamp is a revenue or administrative measure.

"Whatever system the BIR will adopt, it is important that the agency should study it well and be prepared to address any legal question that can be raised against it."

Aggabao said even if the BIR resorts to public bidding under the general procurement law instead of the BOT route, the constitutional impediment to the monitoring scheme is far from being resolved.

He said as far as Congress is concerned, after the extensive public hearings conducted by the committee on ways and means in the 14th Congress, its position is that the SICPA project partakes of a tax measure and that this was supported by then Justice Secretary Agra.

He said any public bidding for the tax stamp project would not be legal without congressional approval.

The House committee on ways and means during the 14th Congress thumbed down the adoption of SICPA’s tax stamps unsolicited proposal because it was deemed as an attempt to raise revenues without the nod of Congress. The panel also said the proposal cannot be done through a variation of the build-operate-transfer (BOT) which will need Congress’ imprimatur.

BIR seeks taxes from barangays

2010-12-13T14:24:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines – The Bureau of Internal Revenue (BIR) expressed Monday its determination to collect withholding taxes from affluent barangays nationwide.

Revenue Commissioner Kim S. Jacinto-Henares instructed her staff to draft up new guidelines to ensure the effective monitoring and collection of taxes from this source.

The BIR chief took the move following reports that many barangays were remiss in remitting withholding taxes due the government.

Henares instructed revenue district officers to start identifying delinquent barangays and take appropriate action against their chairmen and treasurers.

Informed sources said that the erring barangay officials don't bother to collect internal revenue taxes despite huge allotments they are receiving from their local government units.

Henares is allegedly aware that majority of the 24,000 barangays nationwide have been complaining of lack of funds, although many of them are awash with cash like those in exclusive villages and commercial centers in Metro Manila and nearby areas. (Jun Ramirez)

BIR, Customs optimistic on 2011 goal

2010-12-11T00:31:00.000-08:00

By CHINO S. LEYCO
Source: www.mb.com.ph

MANILA, Philippines – Two of the government's main tax agencies are optimistic that they will meet their combined collection target of P1.26 trillion next year after conceding that the P1.141 trillion goal for 2010 is not attainable.

Internal Revenue Commissioner Kim S. Jacinto-Henares, who is responsible for more than 60 percent of the government’s annual income, said she is confident that her agency will meet its P940 billion target next year.

The 2011 revenue goal of the Bureau of Internal Revenue (BIR) is 9.3 percent higher compared with P860 billion revised tax goal for this year.

Jacinto-Henares has already conceded that this year's goal will not be met, adding the BIR can only raise P830 billion.

Meanwhile, Customs Commissioner Angelito A. Alvarez said that his agency is “hopeful” that it will attain the 2011 target of P320 billion on the back of higher imports of infrastructure materials.

The Bureau of Customs, responsible for about a fifth of annual government profit, is expected to increase its tax take by 14 percent next year from P280.7 billion this year.

Alvarez said the 2010 revenue take of government's second biggest revenue agency will be likely below the target by 5 percent.

The inter-agency Development Budget Coordination Committee already set a budget deficit ceiling of P290 billion for 2011 or about 3.2 percent of gross domestic product (GDP).

Finance Secretary Cesar V. Purisima earlier said the government could trim its budget deficit in 2011 to P226 billion.

Purisima explained the narrower deficit is achievable if the country's economy will grow by 7 percent in 2011.

The P226-billion deficit is equivalent to 2.5 percent of GDP.

“Assuming we attain the 7 percent target... the deficit will be much lower than what was expected,” Purisima said.

House panel okays proposal to replace VAT with VAST

2010-12-08T06:37:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines (PNA) — The committee on ways and means of the House of Representatives approved on Wednesday a proposed measure seeking to impose a value simplified tax (VAST) in place of the value added tax (VAT).

House committee chair and Batangas Rep. Hermilando Mandanas, author of House Bill No. 1970, said the approval of the measure will accelerate the legislative process on the bill.

"We are now ready for a full debate on the measure as we will hear the views of our other colleagues in the plenary," he said.

Mandanas said his authorship of the bill had been motivated by the need to increase tax collections, improve the people's perception regarding tax impositions by the government, provide a system that eliminates the scheme predisposed to leakages and loopholes, avoid occasion of corruption, and put in place a more efficient means to maximize the revenue take of the government.

"I've expected differences of opinion on the bill. But let me stress the bill is a response to our promise of change to the people. We've also promised to reduce corruption," he said.

"This bill will also reduce our budget deficit. The VAT is a good law itself, but the problems lies on its actual implementation. Even in the development of our country, it doesn't work," he added.

Mandanas said HB 1970 seeks to amend the National Internal Revenue Code (NIRC) of 1997, to institute the VAST that will effectively replace the highly unpopular VAT.

"Without Congress being perceived to be attempting to hike taxes imposed on the consumers or ultimate users of goods and services, HB 1970 aims to increase the collection of taxes under the NIRC of 1997, as amended by simplifying the taxation system, and reducing the discretion or interpretations of tax applicability that increase temptation for corruption and reduce the tax collection efficiency of the government," he said.

HB 1970 provides for a reduction of the tax rate by 50 percent, or from the current 12 percent to six percent. It shall also allow all the exemptions under the VAT system to continue under the VAST.

Section 1 of the bill which seeks the amendment of Section 105 of the NIRC, defines VAST as an indirect tax and the amount of which may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services.

This rule shall also apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716, or the restructured VAT law.

The bill also provides for a repeal of the input tax and claims of presumptive VAT provisions which were found to be occasions of corruption and causes of material reduction in the expected tax collections of the government.

It also provides for establishment of a framework to facilitate further reduction in the VAST rate through simplifications of the system and reduction of complicated and discretionary tax provisions.

The proposed law would also increase further the exemptions under the VAST system by including all the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Coast Guards and Customs Police, and also retired public school teachers who served over a period of not less than 30 years, or even earlier, if retirement is due to injuries or sickness suffered while in the line of duty.

The threshold of the exempted maximum sale subject to VAST shall also be increased for small vendors and sales/lease of real estates. The provisions applying for three percent tax on sales amounting to P2.5 million and below shall also continue based on the bill.

Cavite Rep. Crispin Remulla, who moved for the approval of HB 1970, expressed hope for cooperation from the Department of Finance (DoF), Bureau of Internal Revenue (BIR) and National Tax Research Center (NTRC) in supporting the proposal.

"We need to shape up the system. Hence, we are calling for the cooperation of Department of Finance, Bureau of Internal Revenue and National Tax Research Center in this endeavor," said Remulla.

In 2008, the government raised P121.14 billion from the RVAT or P32.21 billion higher than the 2007 collection of P88.93 billion.

With VAST, it is expected to generate an additional yearly revenue of P50 billion for the government.

BIR sets revamp

2010-12-08T05:19:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines – The much-awaited major personnel changes at the Bureau of Internal Revenue will happen on Jan. 3 to coincide with the launching of the 2011 collection drive to raise P930 billion, BIR Commissioner Kim S. Jacinto-Henares said Wednesday.

“There will be minor movement for 19 revenue regional directors, but a major one on the level of revenue district officers (RDO),” BIR Commissioner Kim Henares said.

Statistics showed that half of the more than 120 RDOs failed to hit their individual collection targets, thus they will be likely relegated to less important posts during the reorganization.

Ms. Henares said the revamp will be based solely on performance and integrity.

She said those who performed will be transferred to big revenue districts in Metro Manila and other key cities and towns.

She believed that if taxmen will put their hearts and minds on their jobs the agency can easily hit its annual collection target.

The BIR chief agreed with the observation of her predecessor Efren Plana that the BIR is peopled with the best and brightest in the government service. (Jun Ramirez)

Palace, Congress target 2011 budget signing before yearend

2010-12-07T15:22:00.000-08:00

Source: www.bworld.com.ph

PRESIDENT Benigno S. C. Aquino III yesterday said he hopes to sign into law the proposed P1.645-trillion 2011 national budget before the year ends.

The bicameral conference committee started meeting yesterday in a bid to submit a harmonized version of the state spending plan for ratification before both legislative chambers start their Christmas break on Dec. 18.

"[The signing of the budget will be] not earlier than Christmas, but definitely we are hoping that it would be done before the end of the year," Mr. Aquino said in a press briefing after turnover ceremonies of a shelter program in Bani, Pangasinan.

Should the budget become law before yearend, it would be a marked break from the practice for some years of the past administration of relying on a re-enacted budget for the first few months.

Mr. Aquino also assured that safeguards are in place to ensure that massive funds allocated for the conditional cash transfer (CCT) program, which had been nearly doubled to P21.9 billion next year from P12 billion this year to cover 2.3 million poor households from one million, would not be diverted.

The president said he had met with officials of the Department of Social Welfare and Development (DSWD) last Monday to discuss the program’s implementation.

"We were finalizing the mechanics [of the CCT]. How do you actually deliver it? What are the guide posts and the targets that will be achieved at what time? So, I’m confident that everything that can be done has been done to fine-tune the program," Mr. Aquino said.

The president said he also welcomes other suggestions on enhancing the cash incentive scheme for the poor.

"We are still open to other voices who might tell us ways on improving the delivery of this vital service to quite a significant number of families below the poverty line," he said.

Earlier Deputy Presidential Spokesperson Abigail D. Valte said that the Palace has formed a task force on the CCT composed of the DSWD as well as the departments of Health (DoH) and of Interior and Local Government to ensure an effective CCT program.

Representatives of the Senate and the House of Representatives started meeting yesterday to consolidate their respective versions of the national spending plan for next year.

House Appropriations committee chairman Rep. Joseph Emilio A. Abaya (1^st district, Cavite) said he expects discussions to focus on the monitoring mechanism for CCT and health programs.

"We have yet to study the amendments submitted by the Senate, but I see something in between. We haven’t really discussed the cuts. Probably, we will consult the Speaker [Feliciano R. Belmonte, Jr.] about it," Mr. Abaya told reporters after the bicameral conference committee meeting yesterday.

He added that while the P21.9-billion CCT budget remained "intact," there could be some "legal discussions" on the body that will monitor its implementation.

The Senate version of the budget bill replaced the lower House’s Congressional oversight committee with an inter-agency body, consisting of representatives of the Department of Education and of DSWD and DoH, that will monitor fund disbursements.

Another issue that needs to be threshed out during bicameral conference committee talks is the Senate’s P872-million cut from DoH’s P880-million family health program which will be partly used to buy contraceptives, Mr. Abaya said.

Part of the slashed amount was realigned to augment the budget for the 112 state universities and colleges by P143 million and the allocation for the Science and Technology department’s scholarship program by P121 million.

Senate Finance Committee Chairman Franklin M. Drilon justified the cut and said that "putting budget for DoH’s contraceptives is a preemptive measure" since it was done before approval of the controversial Reproductive Health bill.

Despite the differences, Mr. Drilon is confident that the committee will come out with its report on Monday, with both chambers ratifying the budget bill before Dec. 15 which is informally their last session day for the year.

Lawmakers expect the President to sign the budget bill into law on Dec. 29 or 30.

"This is the first time in a decade that we will have a budget signed before the year is over," Mr. Drilon noted. -- Ana Mae G. Roa and Noemi M. Gonzales

Do we need a new BIR?

2010-12-07T15:00:00.000-08:00

Let’s Talk Tax -- By Rolando Devesa

Hitting tax collection targets is not a task for the ordinary Filipino. It’s a herculean job -- a task seemingly fitted solely for the demigods.

That’s why those appointed as BIR commissioners are top-notch professionals.

Right now, the Bureau of Internal Revenue (BIR) is under the helm of a reform-focused CPA-Lawyer, whose integrity and competence has brought about positive changes in how things are done at the BIR.

From Day 1, Commissioner Kim Jacinto-Henares has implemented changes that were calculated to improve the delivery of services, as well as reduce graft and corruption at the BIR. From the adoption of electronic Letters of Authority, streamlining of internal processes, closing of establishments that are non-compliant with the BIR rules and regulations, and of course, to the filing of high-profile criminal tax cases, the BIR is exhausting all administrative means at its disposal to better collect taxes.

What else can be done short of imposing new taxes? For one, there has to be a realization that the country’s premier tax collection agency, as an institution, must be improved. The BIR, as an institution, is simply an old car (not just an old model mind you, but a decades-old car) that is being tasked to perform like a brand new race car. The continuing reliance on the BIR, as an institution, to achieve the country’s tax collection targets is like expecting an 85-year old man to beat a 20-year old in a 10K run.

Senate Bill No. (SB) 1481, filed by Senator Miriam Defensor Santiago, should be looked into by this administration. In filing SB 1481, the good Senator has explained that, "the BIR is hampered by at least three fundamental institutional constraints:

(a) Rigid personnel management system, where promotion is based merely on loyalty and seniority rather than exemplary performance (e.g., exceeding the revenue target);

(b) Compensation structure restricts the hiring of first-rate professionals;

SB 1481 calls for the creation of a National Revenue Authority (NRA) that will exercise the powers and duties of the BIR. Unlike the BIR, which is headed by a Commissioner (with the assistance of deputy commissioners), the NRA will be governed by a Revenue Board which is composed of four representatives from the government and three experts in the fields of economics, accounting, law, business management, and other allied professions. The government representatives will each come from the Department of Finance (DoF), the Department of Budget and Management (DBM), the National Economic and Development Authority (NEDA), and the Securities and Exchange Commission (SEC). The creation of a Revenue Board is an appreciation that tax collection cannot be left to the hands of a single commissioner. At the highest level, there will be a concerted drive towards increased tax collection, with inputs coming from the DoF, DBM, NEDA, and SEC, and experts from the private sector.

While members of the Revenue Board serve for a fixed tenure of office (with different period of expiry), lower officials and employees of the NRA will be hired on a fixed term performance-based contracts. Thus, there might not be a need for the cumbersome Attrition law, as the NRA officials who do not measure up based on performance can be easily replaced. This can be seen as an attempt to balance the benefits of security of tenure with the need to motivate higher individual performance.

Another important feature of SB 1481 is that the officials and employees of the NRA will not be disheartened by low pay since the NRA will not be subject to the Salary Standardization Law. The Revenue Board, under the SB 1481, is authorized to establish a compensation plan for the NRA.

In a way, SB 1481 is a recognition of the fact that it will take more than a few good men to win the battle for increased tax revenues; that an institution can motivate people to do more for the country; and that the BIR, as an institution, must have independence (at least to a certain extent) to pursue the war on tax collection. It is, plain and simple, an acknowledgement that a very old, and poorly maintained car, should not be tasked to race with a new convertible.

When PNOY made his election promise not to impose new taxes, many people in the know doubted the feasibility of such a tack. Even international institutions monitoring our fiscal health have not shown much optimism that revenue collections can be increased without raising new taxes. While we need to continue with the administrative reforms started by Commissioner Kim-Henares, we also need to start looking for more opportunities to expand these administrative reforms. Anyone would choose a new convertible over an old car, right?

BIR changes rules for rewards system

2010-12-06T05:24:00.000-08:00

Source: www.mb.com.ph

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is changing guidelines for its informer's reward system as more and more people are coming out with all sort of unverifiable tax evasion denunciations.

Under new guidelines, BIR will no longer accept information culled from newspaper reports and other inaccurate sources causing the BIR investigators to do much of the sleuthing job.

Revenue Commissioner Kim S. Jacinto-Henares said she has already drafted proposed regulations for the reward system.

This will be up for review and approval by the Department of Finance, she said.

The proposed guideline will make it easier for tax probers to establish the accuracy of such information and collect the deficiency taxes.

It prescribes a deadline for the submission of reports by tax fraud investigators.

Tax fraud probers will only furnish informers with the status of the investigation but not the detailed data gathered as it will constitute unlawful divulgence of information.

The informers will also be required to submit in writing requests for the status of the investigation to prevent them from "stubbornly and persistently" following up the cases. (Jun Ramirez)

BIR confident it can meet Dec. tax goal

2010-12-06T05:20:00.001-08:00

Source: www.mb.com.ph

MANILA, Philippines – Internal Revenue Commissioner Kim S. Jacinto-Henares said Friday that the government's main tax agency is confident to attain its December collection target.

Jacinto-Henares explained in a telephone interview that the 9 percent growth in collection goal this month against the P68.374 billion actual revenue take in December last year is a “reasonable” increase.

“The 9 percent is a goal that seems to be attainable,” Jacinto-Henares added. She also said that the BIR, which makes up more than 60 percent of government income, is keeping its internal full-year collection target of P830 billion, lower compared with the official government goal of P860 billion.

The BIR, meanwhile, will announce its actual November collection performance on December 15.

In January to October, the BIR has collected P670.9 billion, higher by 10 percent compared with P612 billion in the same period last year.

In October alone, the main tax agency's revenue take increased by 16 percent to P63.6 billion from P54.9 billion in the same month in 2009.

Henares said the BIR’s performance is improving compared with last year. She noted that in August, the agency's collection grew by 17 percent, the highest in about 28 months.

With the improving performance of the agency, Henares said the BIR is still striving hard to meet its revised revenue goal of P860 billion for the year.

“We are still striving to keep the P860 billion,” she noted.

She nonetheless reiterated that the previous goal of P830 billion is a “doable” target.

Finance Secretary Cesar V. Purisima earlier said the government will push the BIR and Bureau of Customs to boost their collections as the Department of Budget and Management increases the country's spending efficiency.

DOF advised to slow down in filing tax-evasion charges

2010-11-27T11:45:00.000-08:00

By Nikko Dizon
Philippine Daily Inquirer

MANILA, Philippines—If this Department of Justice

official were to be followed, the Department of Finance should be slowing down in pinning suspected smugglers and tax evaders and focus instead on building airtight cases against them.

“Maybe they should reassess their policy of filing charges every two weeks, with the Bureau of Internal Revenue and the Bureau of Customs alternating. Are we achieving the objective of pinning them down?” a ranking Justice Department official told the Inquirer in a recent interview.

The official requested anonymity for lack of authority to speak on the matter.

Every week, the DOF files charges alternately against alleged smugglers and tax evaders, with officials of the BIR and Customs holding press conferences at the Justice Department to announce the cases they are filing under Run against Tax Evaders (RATE) and Run after Smugglers (RATS) programs, respectively.

The RATE and RATS programs were launched in 2005 during Finance Secretary Cesar Purisima's first stint at the DOF.

The Aquino administration stepped up its campaign to go after tax evaders and smugglers to shore up the cash-strapped government's coffers.

President Aquino himself announced the first case of tax evasion under his administration in his State of the Nation Address in July.

Since then, the BIR and Customs have filed dozens of cases against alleged tax evaders and smugglers at the DOJ, including personalities like movie director Carlo J. Caparas, pawnshop owner William Villarica, and Pilipinas Shell.

Having to file cases every two weeks takes away substantial time to conduct an honest-to-goodness investigation, the Justice Department official said, stressing there ought to be enough documents and evidence against the suspects before a case is filed.

“At the outset, there should already be evidence. The evidence should not be made to follow. That would be unfair to the respondent,” the official said.

The official expressed concern that the public prosecutors would end up getting the blame if the cases were dismissed due to lack of evidence.

“Eventually, they (BIR and Customs) might be discredited—or us at the DOJ

,” the official said.

‘Glass top’ to ensure transparency in BIR

2010-11-26T09:52:00.000-08:00

By Katrina Mennen A. Valdez
Source: www.manilatimes.net

The Bureau of Internal Revenue (BIR) is keen on replacing its frontline personnel with ones who have transparent “glass top” to prevent them from getting bribes from taxpayers with deficiencies. Internal Revenue Commissioner Kim Jacinto-Henares said during an exclusive roundtable with reporters and editors of The ManilaTimes on Friday that if Customs chief Angelito Alvarez introduced the drawer-less desk for Bureau of Customs employees, the BIR will take a similar step but would recommend desks with glass top for its revenue officers.

“I’d like to replace their [employees] drawers with glass top. It signifies transparency and at the same time anything in there [drawers] would be easily seen, thus depriving them [examiners] of concealing [dirty] deeds,” Henares added.

The desks or drawers of revenue officers are susceptible to being used as temporary storage for bribe money from taxpayers with deficiencies or violations.

The BIR accounts for at least two-thirds of the government’s revenue take and is in charge of collecting P860 billion this year, while the Customs bureau contributes about 25 percent and must raise P280 billion.

The Internal Revenue agency has about 12,000 employees nationwide, of which at least 2,000 are tax examiners. Henares said that while the number of BIR’s workers has not increased since 1990, she has no intention of hiring more personnel.

Instead, sshe added, the bureau will retrain its crop of workers at present.

For next year, the BIR was given a budget of P3.258 billion for maintenance and operating expenses, and P46.630 million for capital outlay.

The budget of the agency for this year is P5.327 billion.

Henares said that she is reengineering the BIR by requiring revenue officers to be more pro-active in running after delinquent taxpayers so the government’s revenues from taxes will increase.

She added that all employees from rank-and-file to those occupying career-level positions will have sufficient time to prove themselves that they deserve to be retained or promoted.

The non-performers will be fired under the Lateral Attrition Law, Henares said.

“It would always be meritocracy that would prevail. We do not want to hire more employees as we only have minimal budget. And (getting) additional people requires more [office] space [for BIR], which is another budget constraint,” she added.

REIT firms cannot make money at taxpayers' expense -- Purisima

2010-11-20T22:11:00.000-08:00

Source: www.abs-cbnnews.com

Finance Secretary Cesar Purisima remained firm on his department's stand to require property firms that will avail of tax incentives under the REIT law.

"We are all partners. There is no fight betwen us. They are all my friends. They are just trying to make more money, unfortunately, at our expense," he told reporters at the sidelines of the private-public partnership (PPP) conference that aims to attract investements on infrastructure.

He was referring to real estate firms that are eyeing to take advantage of the tax perks provided by the REIT law, which gives incentives to real estate firms that raise funds through the stock exchange.

"They (firms) are asking for tax exemptions, so as a prudent finance manager I will demand that what they are asking from us be realized," Purisima added.

Purisima had noted the possible tax-eroding effects of the REIT law, which gives incentives to real estate firms that proceed with REIT issues.

The Finance Department, which is keeping the budget deficit in check, estimates the REIT law to result in P2.7 billion in revenue losses annually.

The economic team is seeking higher tax collections amid record budget gaps that could reach up to P325 billion, or 3.9% of the entire economy, this year.

51% vs 33%

The issue on the REIT was triggered when the Department of Finance and the Bureau of Internal Revenue (BIR) pushed for the increase in the required public float of the REIT firms to 51%.

This suggested portion of the firm's stocks that public investors can own is higher than the 33% the Securities and Exchange Commission has specified in the proposed REIT listing rules.

However, in order to enjoy these incentives, the REIT must be listed with a stock exchange and maintain its status as a listed company and comply with all the requirements of the REIT Act, including annually giving out at least 90% of its distributable income to shareholders.

Since investors in REIT firms can also avail of tax incentives out of the portion of their share in almost 75% required distributable income of the firm, market players have been banking on the REIT to attract more investors.

REIT firms pool income-generating property assets and raise money by listing on the stock exchange. It is considered as an alternative investment to buying the physical property.

"We are optimistic that we can come up with a win-win solution in that issue. We are working on the groups concerned," Francis Lim, former Philippine Stock Exchange president, told abs-cbnnews.com on Friday.

Lim shepherded the passing of the REIT law in 2009 before he resigned in January 2010. It has yet to be implemented as the BIR, which is under the Finance Department, has yet to clear the REIT tax rules.

PHL authorities say 2010 deficit won't be breached

2010-11-17T14:50:00.000-08:00

Source: www.gmanews.tv/

Philippine authorities believe the budget deficit will not exceed the P325-billion ceiling this year as the national government continued to exercise prudent spending and improve its tax collection efficiency.

Deputy Treasurer Eduardo Mendiola told reporters Wednesday the 2010 budget shortfall would fall below target at 3.9 percent of the gross domestic product.

“We will not exceed P325 billion, we are very sure of that," Mendiola stressed.

Bureau of Treasury data showed that the deficit totaled P259.8 billion in the first nine months of the year, or P13.9 billion narrower than the P273.7 billion programmed for January-September.

In the same period last year, the deficit reached P237.5 billion as the Bureau of Internal Revenue and the Bureau of Customs failed to deliver on their revenue targets.

Government revenues totaled P894.7 billion in January-September, while expenditures amounted to P1.154 trillion.

Due to the rounding off of numbers, the results may not add up to the exact mathematical equation, the according to the Treasury Bureau.

While the tax take of the BIR increased by 9 percent to P607.3 billion, the amount was P13.2 billion short of the P620.5-billion programmed collection.

In the case of the BOC, its tax take went up by 15.5 percent to P191 billion — an amount P19.2 billion below the P210.2-billion target.

Fiscal authorities have committed to limit the budget deficit to 2 percent of GDP from 2013 the end of the Aquino administration’s term in 2016.

The president and his economic managers are keeping their fingers crossed for another credit rating upgrade by New York-based Moody’s Investors Service following the recent upgrade by Standard & Poor’s Rating Services from BB- to BB.

The upgrade marked a first for the Philippines under the Aquino administration. It brought Philippine sovereign debt to just two notches below investment grade.

“We have upgraded the Philippines based on its steadily improving external liquidity profile and the underlying strengths of its external accounts, which increasingly mitigate the vulnerabilities posed by still high public and external debt, and provide buffer against adverse shifts in terms of trade or investor sentiment," S&P credit analyst Agost Benard said. — VS, GMANews.TV

Tax bureau planning to revive ‘e-report card’ for big firms

2010-11-17T14:45:00.000-08:00

Source: www.bworldonline.com

THE BUREAU of Internal Revenue (BIR) plans to revive a system launched in 2004 but discontinued two years ago that was designed to show big firms how their tax payments fare against peers in the same industry, a ranking BIR official said earlier this week.

"Electronic report cards" will again be sent every quarter to each country’s top 1,400 firms under the jurisdiction of BIR’s Large Taxpayer Service (LTS) to help them "keep track of their... performance as far as paying taxes is concerned," BIR Deputy Commissioner Lilia C. Guillermo said in a telephone interview.

The bureau plans to revive the practice in the second half of next year, Ms. Guillermo said.

Top officers of big companies covered by the LTS will get these quarterly reports via e-mail, she explained.

When the system was first implemented in 2004, such officers got the report twice a year, she recalled.

"They (heads of companies) are assumed to rely on their auditors for their finances...so this project would help them monitor if the [company is paying] right [taxes] and, at the same time, their standing in the industry based on their tax performance," she said.

The LTS accounts for about 60% of total tax collections.

Ms. Guillermo said the program was suspended in 2008, being "unprioritized" due to the need to make the system have a more comprehensive coverage.

She recalled that the BIR leadership then cited the need to "widen the benchmarking" of industries under the LTS "to include more companies."

"The more companies you can cover in an industry, the more reliable the data you can get," Ms. Guillermo explained.

BIR Commissioner Kim S. Jacinto-Henares said in a separate interview that "those [companies] that know their standings will be more willing to pay [the right amount of taxes] to improve their performance."

The project is part of the bureau’s P600-million electronic Tax Information System (e-TIS) program designed to improve the bureau’s database by upgrading software for tax registration, collection monitoring and audit.

The system was included in the recently approved $434-million Millennium Challenge Corp. (MCC) compact grant.

Of the $54.3 million the BIR got from that US assistance, $4.6 million will be used by the International Monetary Fund (IMF) that will provide "technical assistance" to the bureau during the grant’s 40-month run.

An IMF "assessment team" will visit in the Philippines from Nov. 22-Dec. 3, Ms. Jacinto-Henares said. -- Prinz P. Magtulis

BIR meets October collection target, gets P63.56B

2010-11-17T06:15:00.000-08:00

By Ronnel Domingo
Philippine Daily Inquirer

The Bureau of Internal Revenue met its monthly target for October, collecting P63.564 billion in taxes, the agency’s chief Kim S. Henares said Monday.

Henares said the October collection was up by P8.644 billion, or 15.74 percent year on year from P54.92 billion in the same month of 2009.

Also, last month’s yield was P1.012 billion, or 1.62 percent, above the target of P62.55 billion.

“Both the regional offices and the Large Taxpayers Service (LTS) [office] contributed significantly to the BIR’s performance for the month,” Henares said.

She said regional offices accounted for a total of P26.807 billion in revenue, an increase of P4.731 billion, or 21.43 percent year on year and 2.13 percent higher than the goal for the month.

Also, the LTS turned in P35.149 billion, which was 12.77 percent higher year on year and 7.42 percent higher than the goal.

“The BIR’s large taxpayers district office for Cebu City saw the largest month-on-month collection increase at 24.99 percent, while the excise taxpayers group [office] accounted for the highest collection surplus, at 10.49 percent over its October revenue target,” Henares added.

Henares attributed the BIR’s October results to “the determination of revenuers across the country to support the government’s development efforts.”

“Everyone is working [hard] because they have to show that they are performing,” she said, adding that the bureau’s full-year goal of P830 billion was achievable.

The BIR, whose collections represent about three-quarters of the government’s yearly revenues, needs to meet its target to mitigate the effect of the budget deficit on the state’s finances.

Govt cuts spending in Oct.

2010-11-12T15:34:00.000-08:00

Source: www.manilatimes.net

The Aquino administration likely spent below target in October, which may lead the government to be well within its budget deficit ceiling for the month, the Department of Budget and Management (DBM) said Friday. In a briefing, Budget Secretary Florencio Abad said initial data gathered by the agency showed the government may likely be below the expenditure goal of P98 billion for October.

“We’re still awaiting for data, insofar as the non-cash portion of the disbursements and these are the interest payments and tax expenditure fund,” Abad said.

“In terms of October last year, we will still fall below,” he added.

Earlier, the Bureau of Customs (BOC) said it collected only P18 billion last month, or P9 billion less than its target of P27 billion. Customs Commissioner Angelito Alvarez blamed the duty-free entry of oil, cement, wheat and certain steel products for the weak results.

He also said the agency was hit by the strengthening peso, which touched P42:$1 last week.

The Department of Finance estimates that for every peso appreciation, the BOC loses P2.6 billion a year.

Abad said the Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares told him that her agency may reach its P62-billion collection goal for last month.

On Monday, the BIR had said it was only P1.3 billion shy of hitting its target.

“So far, the way developments go, there is still a good chance that the P325-billion [deficit ceiling] can be achieved,” Abad said.

Opportunities abound for post-typhoon entrepreneurs

2010-11-10T04:17:00.000-08:00

By Villamor Visaya Jr.
Inquirer Northern Luzon

ILAGAN, Philippines—The Chinese tend to equate crisis with both danger and opportunity. And what’s been good for one of the world’s oldest cultures may also be good for communities recently ravaged by Typhoon “Juan.”

Salvage operators, carpenters, mobile phone charging station owners and distilled water traders are just some of the province’s service providers who have been earning tidy sums for two weeks running.

Earning from junk

Some of these entrepreneurs were themselves victims of the typhoon, which had cost Cagayan Valley, notably Isabela, up to P4 billion in crop losses and P403 million in road damages.

Residents have been seen sifting through the debris to salvage whatever they can to sell or recycle—twisted corrugated sheets, old bottles, driftwood, pieces of cardboard and plastic containers.

Gregorio Calanda, 49, who has a 10-year-old materials recovery business, says he used to earn about P300 to P500 a day. Now he earns as much as P1,000 to P2,000 a day because of what Juan wrought.

“Paspasanmi ita ta kaadduanna ti maala ken mailako. Inton agbayag ket agsublikami manen iti ordinario a kitami (We are working double time now because of the voluminous items to be recovered and sold. Later, we will revert to our usual earnings),” he says.

The long All Saints’ Day weekend afforded schoolchildren the same opportunity to earn from junk.

Owners of makeshift stations set up for charging mobile phones for a fee have also been raking it in.

Ilagan still has no electricity, but these stations run on generators. They charge P10 for each mobile phone.

Charges

“For an average of 20 mobile phones in an hour or two, we can earn P200. Multiply that by five, that is P1,000 a day, which is additional income indeed,” says Pedro Uy, who deals in assorted goods.

The service also covers recharging computer laptop batteries, digital cameras and video cameras, he says.

The most “in demand” workers in times of calamity are carpenters.

Although they too have lost their homes, the carpenters have been on call every day for the past two weeks. Each may earn up to P500 for a day’s work.

“Dimi maguantaan ti kaadu ti agpaayos ti babbalay. No asino ti umuna ket isun ti unaenmi ken ti alisto nga agbayad ah (We cannot accommodate all requests for carpentry work. It would be on a first-come, first-served basis, and those who can pay us immediately),” says Rogelio Olla, 50, a carpenter-masonry contractor.

Free lunch

Pedro Ventura, 53, says free lunch and lodging become perks when they are called to rebuild houses in remote places.

Also, the power blackout has severely affected water distribution. Long queues at distilled water refilling stations are still a common sight here.

Water-station owners have been earning an average of P3,000 to P6,000 a day, a sharp rise from the usual P1,000 daily income before the typhoon.

“People need safe and potable water. After the typhoon, water from pump wells and open wells usually turn into breeding grounds [for disease-carrying insects], according to doctors,” says Melanie Antonio, 38, a distilled-water seller.

Reappointed After Dismissal

2010-11-10T02:56:00.000-08:00

At Issue By HERN. P. ZENAROSA

Source: www.mb.com.ph

MANILA, Philippines – Whatever they may say, it was a good thing that instead of the crisis that it would have fomented, it was averted by the timely presidential intervention.

I am referring to President Aquino’s sudden decision to reappoint at least 50 Executive Service Officers in the Bureau of Internal Revenue who were earlier dismissed from their positions for lack of the required career civil service qualification.

It is recalled that earlier, Malacañang caused their mass dismissal with the issuance of Memorandum Circular No. 2 terminating the services of non-CESO officials occupying career executive service positions in all offices under the Executive Department.

The mass dismissal of the ranking revenue officials created what insiders say “a huge vacuum that ultimately paralyzed government operations,” particularly on the matter of tax collections.

Before the problem could turn into serious disruption of BIR operations, however, specifically in raising P500 billion at year’s end, Malacanang moved to halt the departure of the dismissed officials by reinstating them in their positions.

Questions that President Benigno C. Aquino III is not getting the best advice from his Palace assistants have been aired on and off by well-meaning observers and the frequency of such observations is undoubtedly hurting public confidence in the Executive Office.

In fact, the case of the non-Career Executive Service Officers who were reappointed by the President after they were dismissed en-masse was only the latest in what may be considered as a whacking Malacanang faux pas.

Whoever persuaded the President to effect such wholesale dismissal of public officials should resign without being told – in the interest of public service.

Earlier, President Aquino also made mention of a revamp in the Cabinet anytime before the year ends only to backtrack and say his statement was misinterpreted.

And then again. when reminded of his announced plan to appoint acting Local Governments Secretary Jesse Robredo as head of a new agency, he backtracked still, arguing it was “far from saying that he is already getting the post,” whatever that means.

Earlier, the President asserted the issuance of the controversial Executive Order No. 7 in response to the petition before the Supreme Court questioning its legality. EO No. 7 suspends the allowances and perks given to members of the boards of government-owned and controlled corporations and financial institutions which are thought to be excessive.

It is the fourth Executive Order issued by President Aquino being challenged in the High Court by various quarters.

In a statement, the President said, “I don’t know if they will order me to answer anything because I’m part of a co-equal branch and I’m supposed to be not subject to suit by anybody.”

Even so, the President said, pertinent government officials are expected to respond to the High Court’s order and explain their position. * * *

Beloved, while I was making every endeavor to write to you about our common salvation, I found it necessary to write to you , exhorting you to contend earnestly for the Faith once for all delivered to the saints. – The Epistle of St. Jude

Gov't Crisis Averted

2010-11-07T02:38:00.000-08:00

Source: www.mb.com.ph

Aquino Reappoints 50 Non-CESO Officials Holding Key BIR Posts

By JUN RAMIREZ

A looming government crisis was averted when President Benigno S. Aquino III decided to reappoint at least 50 non-Career Executive Service Officers (CESO) holding sensitive positions at the Bureau of Internal Revenue (BIR), it was learned Sunday.

Informed sources said BIR Commissioner Kim S. Jacinto-Henares worked out the reappointment of these revenue officials who hold positions from assistant commissioner down to regional directors and assistant directors.

The same sources said that had President Aquino terminated the services of these ranking revenue officials pursuant to Memorandum Circular No. 2, they would have left a huge vacuum and ultimately paralyzed government operations, particularly tax collection.

Apparently, Aquino reappointed key revenue officials to prevent any disruption in the BIR’s effort to raise at least P860 billion this year.

It was the first mass reappointment made by the President since Malacañang issued MC No. 2 terminating the services of non-CESO officials occupying Career Executive Service (CES) positions in all offices and agencies of the executive branch.

The circular, signed by Executive Secretary Paquito Ochoa, stated partly that “non-CESO officials occupying Career Executive Service (CES) positions in all agencies of the executive branch shall remain in office and continue to perform their duties and discharge their responsibilities until October 31, 2010, or until their resignations have been accepted, or their respective replacements have been appointed or designated.”

The sources said the mass reappointment of non-CESO officials at the BIR was the first made by Malacañang as their counterparts in other government offices and agencies are still waiting their reappointments and holding their posts in acting capacities.

The Commission on Audit (CoA) is reportedly processing the stop-salary-payment papers of these CES “acting” officials in case they are not reappointed.

It was not immediately known how many non-CESO officials in the BIR are affected by the reappointment order.

But the same sources estimated their number at around 50. They expressed their gratitude to Henares as well as to the President for what they invariably called “magnanimous” and “humanitarian” gestures.

One of the officials said that he did not take the CESO course believing that the BIR, as a collection-based agency of the government like the Bureau of Customs, is governed by separate laws like the Lateral Attrition Law (LAL).

The LAL rewards performers with cash, promotions, and transfer to key positions and punishes inefficient workers with either demotion or ouster from the service.

Former SSS execs Cunanan, Neri face tax evasion raps

2010-11-05T07:19:00.001-07:00

Source: www.gmanews.tv

The Bureau of Internal Revenue has filed separate tax evasion complaints against former Social Security System president Romulo Neri and SSS chairman Thelmo Cunanan for supposedly failing to declare their full income and to pay the proper amount of income taxes in the past years.

In the complaints lodged before the Department of Justice on Thursday, the BIR said Neri and Cunanan failed to declare the income they earned as board members of Philex Mining Corp. and Unionbank of the Philippines.

Neri and Cunanan were able to sit as directors in those publicly listed companies because SSS, the pension fund for private sector employees, owns shares of stock in those companies.

BIR Commissioner Kim Jacinto-Henares said the bureau's investigation was triggered by the Senate finance committee's inquiry into the so-called excessive bonuses and perks of officials in government-owned and controlled corporations (GOCCs).

The BIR said Neri earned P11.3 million in 2008 and P34.2 million in 2009. However, Neri allegedly did not declare fully his income, resulting in a tax deficiency of P6.2 million for 2008 and P11.9 million for 2009.

The BIR is now requiring Neri to pay P18.2 million in aggregate tax liabilities, which include surcharges and interest.

Cunanan 'concealed true income'

The BIR also alleged that Cunanan "concealed his true income by his deliberate and willful failure to file his income tax returns for taxable years 2005 to 2007."

The bureau's investigation showed Cunanan earned around P71 million for the said three years in his capacity as SSS chairman and member of the board of directors of Philex, Unionbank, First Philippine Holdings Corp., and Belle Corporation.

However, he supposedly did not declare the perks and bonuses he received from the GOCCs. Thus, the BIR is now requiring the former military general to pay P42 million in aggregate tax liabilities, which include surcharges and interests.

Neri, Cunanan: Incomes properly declared

Both Neri and Cunanan, however, denied BIR’s allegations that they failed to pay their tax liabilities stemming from their perks and bonuses as former GOCC board members, and insisted that they properly declared their respective incomes in the past two years.

Neri said in a radio interview that he immediately went to Henares’ office upon hearing of the complaints to explain the “discrepancies" between his records and BIR’s files.

“I only received my profit sharing of 2008, na nag-reflect sa (which was reflected in) 2009. At yung 2009 ngayon lang 2010 ko na-receive kaya yun ang dineclare ko (And I received my share for 2009 only this year 2010, so that’s what I declared) on my income tax return," he said in an interview over radio dzMM on Thursday.

"Naka-declare lahat (All the income was declared)," Neri emphasized.

"Tama ang mga records namin. I showed it pa nga in the Senate hearing. Kaya hindi ko alam kung saan nakuha iyon ng BIR. Ayaw ipakita ng BIR kung saan nang kung saan nanggaling ang mga figures nila. Sabi ko nga, 'Show it to me' para malaman kung saan ang differences namin," said Neri.

(Our records are correct. I even showed these in the Senate hearing. That is why I don't know where the BIR got its information. It does not want to show where it got its figures. So I said, "Show it to me" so that I know where our differences are.)

Neri likewise said he knows that the BIR “is only doing its job," but admitted that he felt the agency’s move was “unfair."

“Sabi ko kina Kim Henares at sa mga tauhan nya, unfair naman ang ginawa nila. Dinala agad sa DOJ," he said. (I told Kim Henares and her people, what they did was unfair. They immediately brought it to the DOJ.)

“[I wish] they gave me a chance to explain my records and to compare. [There was no] due process," Neri added.

Cunanan, for his part, also said he properly declared all his earnings in 2008 and 2009.

“In truth and in fact, I faithfully filed my ITRs [income tax returns] for those years, together with W-2 issued by the companies," he said in a reaction aired over GMA News’ “24 Oras" on Thursday night.

Cunanan is currently undergoing cancer treatment in China.

Drilon lauds raps vs ex-SSS execs

Meanwhile, Senator Franklin Drilon on Thursday lauded the BIR move to file against Neri and Cunanan.

“As we have said before and beyond the abuses that we have seen in public enterprises, there should be criminal liabilities on the part of the SSS officials who exercised their stock option by sitting in the boards of private companies," Drilon said in a statement released Thursday.

The so-called excessive perks and bonuses received by GOCC officials were recently the subject of an inquiry by the Senate finance committee.

Drilon, chairman of the committee, had urged SSS officials to recover the money received by Neri, Cunanan, and SSS legal consultant Sergio Apostol while they were on the board of directors of Philex, Unionbank, and First Philippine Holdings.

Citing data from several private companies last July, he said Cunanan received P132.6 million in per diems and bonuses, profit sharing and stock options, and other bonuses as the SSS representative to the board of Philex, Unionbank, and First Holdings from 2007 to 2010.

Neri likewise received P44.2 million — P36.9 million were bonuses — while he was board member of Philex and Unionbank from 2008 to 2010. Apostol got P25.1 million including P23.4 million in bonuses from 2008 to 2010.

Drilon then asked the present SSS leadership to "institute measures to recover these payments given to their previous SSS commissioners."

“Even if they argued that they used their own money in exercising their stock option, the money that they received from it should have pertained to the pension fund that they represent," said Drilon.

“These are trust funds that do not belong to themselves and to the government, but to the workers. It is the fiduciary obligation of the commissioners of SSS to protect the trust fund and not appropriate for themselves huge amounts of money in the form of obscene allowances," he added.

On Thursday, BIR chief Henares said the bureau is also checking whether other GOCC officials declared their incomes, perks and bonuses properly.

"We are looking at other officials whether they have declared the right income," she said.

SSS also has shares in Philippine Long Distance Telephone Co., Security Bank and Trust Co., Metropolitan Bank and Trust Co., Energy Development Corp., Globe Telecom, Inc., and Ayala Corp., aside from Philex and Unionbank. —With Andreo C. Calonzo and Kimberly Jane T. Tan/LBG/RSJ/JV, GMANews.TV

Henares at the helm: A taxing responsibility

2010-11-05T00:55:00.001-07:00

Source: www.manilastandardtoday.com

Newly-appointed Bureau of Internal Revenue Commissioner Kim Henares obtained her accounting degree from De La Salle University and became a Certified Public Accountant in 1981. She later earned her law degree from the Ateneo de Manila University, where she graduated with honors. After passing the Philippine Bar, she pursued a Master of Laws from the prestigious Georgetown University in Washington DC.

Before becoming BIR Commissioner, Henares was a tax lawyer for SGV & Co., senior partner at the Jacinto Jacob Law Office, vice-president for ING Bank, governor for the Board of Investments and Senior Private Sector Development Specialist for the World Bank Group. She was also BIR Deputy Commissioner of the Special Concerns Group and officer-in-charge of the Large Taxpayers Service from 2003 to 2005.

Henares herself agrees that aside perhaps from former BIR Commissioner Guillermo Parayno Jr., nobody else possesses the same academic background, professional experience and expertise from among those who have coveted and continue to covet the post of BIR Commissioner.

Her qualifications notwithstanding, Henares admits that being in charge of the BIR is a challenge that exceeds—in both magnitude and scope—her previous assignments. After all, the bureau is widely perceived as one of the country’s most corrupt government offices.

“You have to undo 106 years of old habits and acquire new ways of doing things—a new mindset. It’s really about making sure people really believe that we’re serious,” ” she says.

While there are admittedly better prospects with greater financial rewards in the private sector, she claims there is only reason for her stay in the bureau: “in my mind this is our last chance, our country’s last chance, and I have to contribute to it and give it my best shot,” says Henares.

The tax dilemma

The sense of urgency in Henares’ statement is not without bases. A number of reports have cited a WB estimate, which says that half of every peso collected by the BIR is lost to corruption. Another estimate by the Department of Finance puts the total annual tax leakage at about P240 billion.

A technical report, “Philippine Tax Leakages: An Assessment,” released in January 2006 said that in 1998, tax leaks accounted to almost 100 percent of the decline in government’s tax effort.

According to the same report, tax leakages in excise tax for sin products was estimated at P2.3 billion in 1995, which declined to about P1.5 billion in 2000 mainly due to reforms under the 1997 Comprehensive Tax Reform Program.

In 2003, the National Tax Research Center reported that at least P127 billion had been lost through evasion from individual, corporate and value-added taxes for the years 1998 to 2002. During the same five-year period, NTRC estimated an additional P270 billion was lost to tax evasion by corporate taxpayers; plus P208 billion tax leakage from VAT.

The NTRC estimated in 2006 that the individual income tax gap had averaged about P36 billion per year in 2001 to 2005. Around two-thirds of the estimated amount is lost to evasion by professionals and self-employed individuals.

BIR’s tax effort exhibited a declining trend from a peak of 13 percent in 1997 to just about 10 percent in 2004 partly due to forgone collections.

Reforms, initiatives, results

Three months ago, at the beginning of her term, Henares said that raising figures on tax effort from 12.3 percent of gross domestic product to 15 percent was “doable.” According to her, even without new tax measures, as President Benigno Aquino III had promised during the campaign, the government still stood to collect about P150 billion as soon as it started running after tax cheats, corrupt agents, and smugglers.

The tax agency has since, filed 11 cases of tax evasion and fraud, creating a “chilling effect” among tax evaders.

In September, the bureau surpassed its collection target by P1.06 billion—the first time since the start of the year. The agency collected P60.96 billion for the month, posting an 8.4 percent increase from last year’s P56.24 billion same-period collections.

BIR’s January to September collection now stands at P607.33 billion, short by almost P31 billion from the set goal for the period, but an improvement of nine percent compared to last year’s collections.

According to Henares, the BIR’s collections grew by 17 percent in August, the highest in 28 months.

Last month, the government issued regulations effectively relaxing access restrictions to financial information involving suspected tax cheats. Tax authorities now find it easier to obtain and exchange information for purposes of monitoring tax payments.

According to the Organization for Economic Co-operation and Development, the country has a network of more than 30 treaties that provide for exchange of information on tax matters. The move enables many of the said treaties to meet the international standard, “reflecting the worldwide movement towards greater transparency and exchange of information.”

Demoralization and political pressure?

Henares expresses optimism over this policy shift towards greater transparency in governance, as she does over marked improvements in the bureau’s revenue collection effort.

But an insider from the bureau claims that the crusading tax chief will have to contend with much more than just raising collection and meeting targets. She will also have to deal with supposed demoralization from within the bureau, as well as withstand political pressures—ranging from her choice of deputies to appeals for leniency on behalf of well-connected tax evaders—from a larger bureaucracy.

The source claims that morale is low in the bureau. “There is unrest,” he says.

According to him, last month, contracts of 40 temporary employees were not renewed without the benefit of a performance assessment, while appointments of other top officials have been nullified because of the President’s Executive Order (EO) Nos. 1 and 2. Most of these officials are career civil servants who have worked in the BIR for more than a decade.

(EO No. 2 orders the immediate removal of alleged “midnight appointees” by former President Gloria Macapagal-Arroyo; EO No. 3 revokes career executive service officer [CESO] rank to lawyers in government. Both EOs are questioned before the Supreme Court for supposed legal infirmities.)

Still, issues internal to the agency are negligible in comparison to the task of having to resist pressures from government’s powers-that-be. One of them, according to the source, is Executive Secretary Paquito “Jojo” Ochoa Jr.—Henares’ classmate from the Ateneo School of Law—who allegedly bears a grudge against Henares because the latter has refused his endorsement of lawyer Othelo Carag for the position of BIR Deputy Commissioner.

The source says that Henares, like most other officials in the economic and finance cluster, is identified with the “Balay” group of Mar Roxas, Aquino’s vice presidential running mate—“which is why ‘Samar’ (with which Ochoa is identified) has been salivating to have their own people appointed here (BIR),” he says.

Carag, former Assistant Secretary for the Department of National Defense (DND) from 2005 to 2006, is a senior partner of Carag de Mesa and Caballero Law Offices —a distinction he shares with current Chief Presidential Legal Counsel Eduardo de Mesa, who in turn was Ochoa’s partner in De Mesa and Ochoa Law Offices.”

An unexpected call

But it was another Ochoa partner, this time from the Marcos Ochoa Serapio Tan Law Firm (MOST Law), who had in one instance earned the ire of Henares, says the source. This was when lawyer Edward Serapio had allegedly called up Henares to request that the P5.5 billion tax evasion case filed against Macario Gaw be remanded from the Department of Justice (DOJ) where it has already been filed, back to the BIR, where it will be easier and cheaper to “negotiate” for a settlement of the case, rather than risk a conviction by the courts.

In an interview with the Manila Standard Today, Henares, though refusing to identify the caller, admitted having in fact received such a call from a “private individual.”

“There was a call that said can they file a motion to remand the case back to me, to BIR. I said no, you’re just wasting your time. Why don’t you defend yourself at the DOJ?” she narrated.

Henares however clarified that she did not interpret the call as a signal to “back down” from pursuing the case or to “back off” from prosecuting Gaw. For her, it was just another request she could not accommodate.

“It’s normal for people to approach some people who they think can talk to me. For me it’s simple, if you have a strong case, then you don’t have to look for anyone. You can come and talk to me and I will look at your case, and I will make a decision based on the law,” said Henares.

But another official, speaking on condition of anonymity, had claimed that the request had in fact irked Henares. Asked whether Serapio had name dropped Ochoa, the official replied: “No. But we can put two and two together.”

The BOC, too?

Meanwhile, sources from another agency, the Bureau of Customs (BOC), revealed that Serapio had also interceded on behalf of Cross Country Oil and Petroleum Corp, for a case already filed with the DOJ.

The case filed by the BOC against the company said: “(Cross Country Oil and Petroleum Corp. was a) small, undercapitalized company that was able to import nearly P8.5 billion worth of petroleum products between March 2009 and September this year.” The BOC has demanded payment of the said P8.5 billion, as the firm had allegedly served as front for a big-time petroleum smuggling syndicate.

Like the P5.5 billion peso BIR case of Macario Gaw, Serapio has also allegedly lobbied for a remand of the P8.5 billion case against Cross Country. Unlike Henares who refused the request outrightly, a customs insider alleges that BOC officials have been more accommodating in considering the request, mainly because of two reasons: first, Customs Deputy Commissioner Peter Manzano was Serapio’s junior partner in MOST Law; and second, intermediaries who had claimed they were sent by Senator Bong Revilla have supported the request.

“Bantayan n’yo yung kaso. Kapag bumalik sa ahensiya (BOC) tapos maareglo doon, alam niyo na ang nangyari (Monitor the case. If it is remanded to the BOC and settled there, you will have known what happened),” the source said.

OES vs BIR?

Executive Secretary Jojo Ochoa refused to comment on the alleged “activities” of his law partner. Another Palace aide, however, admitted that Serapio was an informal member of Aquino’s transition team at the beginning of the President’s term though was later “eased out” because of past involvement in former President Joseph Estrada’s controversial Muslim Youth Foundation Inc., among others.

The same Palace insider also divulged that they (from the Office of the Executive Secretary) were not satisfied with Henares’ performance particularly with regard to the BIR’s proposed toll tax for the South Luzon Expressway, for which the Supreme Court had issued a temporary restraining order. “Tira nang tira, kulang naman sa aral (she proposes without due diligence),” he claimed.

Henares’ response to the criticism was concise: “tell them to wait for the results of what we’ve been doing here... I don’t really have to do this job; I can do a lot of other things and earn substantial amount of money without all theses headaches.”

As for what would most likely make her leave government service, Kim Henares cites three probable causes: “(1) When I’m no longer effective; (2) when my objectives and my bosses’ objectives are no longer the same; (3) or when my principles would be compromised.”

The multibillion-peso question

The BIR and the BOC are the Philippines’ top two revenue earners. They are also perceived to be two of its most corrupt government offices.

This provides both an opportunity and a challenge for a President who ran and won under the platform of good governance. Reform these two agencies and the promise of reforming the entire bureaucracy, if not the whole nation, becomes more believable, more achievable.

The conclusion to this report is short and direct. It comes in the form of a question borrowed from a BIR official: “How does he (Aquino) intend to increase collections when his friends have been asking for cases (filed) against tax evaders to be dropped ?”

How indeed?

We can only minimize corruption in BIR — Henares

2010-11-05T00:51:00.000-07:00

Source: www.mb.com.ph

Commissioner Kim S. Jacinto Henares of the Bureau of Internal Revenue (BIR) admitted on Tuesday that graft and corruption in the agency cannot be eliminated during the Aquino administration and “perhaps not even in our lifetime.”

“All we can do is minimize it and those caught committing the offense should be severely punished,” the BIR chief said.

Henares made the comment as the Transparency International listed the Philippines as one of the most corrupt countries in the world in its recent survey.

The fight against corruption in government service is the centerpiece of the Aquino government as emphasized by the slogan "Kung Walang Corrupt, Walang Mahirap."

A study conducted by the World Bank showed the government loses billions of pesos annually from corruption in the BIR and Bureau of Customs that cause the impoverishment of millions of Filipinos.

"How can I keep an eye and identify those involve in corruption among our more than 12,000 officials and employees," she said.

She said that even on one-on-one basis, it is hard to catch an offender like a wife who cannot catch a cheating husband.

“But I warned them that whoever is caught will be punished accordingly,” she added.

She said that at the start of her administration all past deeds were forgotten as “I gave them symbolic clean sheets of paper and it is up to them what to do about it.”

Henares said the forthcoming nationwide revamp of key BIR field officials is not only anchored on collection performance of taxmen but also on integrity and honesty.

The revenue chief stressed she does not believe that corruption or under-the-table deals in the agency are initiated by taxpayers to reduce their tax payments and that tax examiners readily accepts the bribe because of low pay.

“It takes two to tango as there are lots of bright and talented tax examiners capable of manipulating financial statements to reduce the tax liabilities of their clients,” she noted.

BIR insiders said Henares is capable of minimizing the incidence of corruption as she has the political will to do so.

They pointed out that Henares has already established a roadmap for the next administration to follow, such as the “no-padrino” system in the transfer of revenue officials as well as promotions based on merit.

Aquino told to assess effects of Juan on 2011 budget

2010-11-02T05:08:00.000-07:00

Source: www.gmanews.tv/story

The Aquino administration should assess the effect of the damage brought about by super typhoon Juan on the 2011 budget and make the necessary adjustments if needed, Senator Ralph Recto said.

"Typhoon Juan has just planted itself to be one big macroeconomic assumption on the national budget next year. For sure, the damage it has created will affect our spending and sourcing of funds," Recto said in a statement on Tuesday.

The senator, who heads the Senate committee on ways and means, said the onslaught might affect the growth targets set by the administration for this year and in 2011.

"How will these affect the country's fourth quarter growth or its overall growth targets for 2011? The administration may need to revisit its targets and take into consideration the recent onslaught," he said.

Recto explained that the damage caused by Juan will force the administration to make a separate allocation for rehabilitation projects.

"We cannot ignore the impact of the lossess we incurred because of the typhoon. It would also take funds to rehabilitate what was lost like roads, bridges, and other public structures," he said.

He likewise said the damage caused by Juan on crops, estimated to be over P7 billion, might force the country to import products that would otherwise have been available domestically.

"Given these facts, does this mean we have to import rice next year given that Cagayan Valley, which was badly hit by the typhoon, is the second largest producer of rice in the country," he said.

Recto and Senator Francis Pangilinan had earlier sought a budget allocation for the typhoon victims and the repair of infrastructures damaged by Juan.

Recto suggested that the government draw "emergency" funding from savings from interest debt payments and the remaining funds from this year’s conditional cash transfer (CCT) program. - VVP, GMANews.TV

Most CES Positions Filled Up — Palace

2010-10-29T04:13:00.000-07:00

Source: www.gmanews.tv

Most of the career executive service (CES) positions previously held by non-career officials have been filled with qualified appointees in recent months, a Palace official said on Thursday.

Deputy Presidential Spokeswoman Abigail Valte assured that necessary appointments have been made to ensure uninterrupted government operations despite a recent decision not to extend the terms of government officials without career service eligibility this month.

“We announce the appointments every weekend. From what I’ve seen, we have filled many positions from the time the President assumed office,” Valte said in a press briefing in the Palace, when asked about the vacancies left by non-career officials in government.

Chief Presidential Legal Counsel Eduardo de Mesa said some of the non-career officials have been replaced while officers-in-charge have been designated in other government agencies.

Valte, however, admitted she was unaware of the exact number of career positions left unfilled by the President.

She added that the executive branch must abide by the appointment ban during the election period for now. “Of course, you have to take into consideration the appointments ban – that the exemption that the Executive Secretary applied for was not a blanket exemption,” she said.

Presidential Spokesman Edwin Lacierda announced earlier that Memorandum Circular 2, which allowed non-career executive service officers (non-CESOs) occupying career executive service posts to stay until the end of October, will expire as scheduled.

The second circular amended Memorandum Circular No. 1 which ordered non-CESOs to stay until July 31 in line with the administration’s policy to professionalize the civil service. Over a thousand non-career officials are reportedly affected by the President’s circular.

Malacañang is expected to issue another memorandum circular to formalize its decision to let go of non-career officials holding CESO positions this month.

“As of this morning, they have not given us any advice. I have not seen any release from the Office of the Executive Secretary so let’s wait,” Valte said when asked about the issuance of the new memorandum.

But Executive Secretary Paquito Ochoa Jr. issued a memorandum ordering all department secretaries and heads of agencies in the Executive Department to submit a list of potential persons who will replace the remaining non-career officials occupying CES positions.

Ochoa issued a memorandum to ensure continuity of government operations and transactions as well as delivery of public services.

“You are hereby directed to immediately submit to the President, through the Executive Secretary, the remaining recommendees for possible appointment or reappointment by the President to Career Executive Service positions currently occupied by non-CES Officers or to Heads of Office and Agencies,” the memo read.

Ochoa said the recommended officials for CES positions should come from the following ranks “in the order given” – CESO officers; career executive service eligibles; those who passed the written exams but yet to complete the other stages of civil service eligibility; those who have been validly conferred by the Civil Service Commission, Career Service Executive Eligibility (CSEE), and Career Executive Officer Eligibility (CEOE) but have yet to complete other stages of eligibility process; and those who have applied for the written civil service exams scheduled on October 30.

If no person could be chosen from the above ranks, incumbents who have yet applied for CES examinations or have failed the same may be recommended for the position.

Vacate Posts after Oct. 31, Palace Tells Non-CESO Execs

2010-10-28T00:38:00.000-07:00

Source: www.mb.com.ph

Government officers who are not Career Executive Service Officers (CESO) must vacate their posts when a three-month extension of their term lapses on October 31.

Presidential Spokesman Edwin Lacierda on Wednesday announced they will no longer extend the tour of duty of non-career officials holding Career Executive Service (CES) positions in agencies covered in Memorandum Circular 2.

The second circular from the President earlier changed the termination date of non-career officials occupying CES positions from July 31, 2010 to October 31, 2010.

Lacierda said he met with Executive Secretary Paquito Ochoa Jr. last Wednesday where they tackled whether to implement another three-month extension of the services of government officials affected by MC 2.

"I understand there is no more extension of MC 2, Lacierda said in a press briefing in the Palace. Asked if this was a final decision, Lacierda said: “To my knowledge, yes.”

The President earlier issued MC 2 allowing non-career officials in CES positions to remain in office until October 31 or until their resignations have been accepted and/or until their respective replacements have been appointed or designated, whichever comes first, unless they are re-appointed in the meantime.

In case the head of agency has resigned and no replacement was appointed yet, the second circular authorized the next-in-rank and most senior official of the agency to perform the duties of the position until October 31, 2010 or until a replacement is appointed.

MC 2 sought to ensure continuity of government operations and deliver of services to the people.

The President previously issued Memorandum Circular No. 1 which extended for a month the terms of non-career personnel and contractual workers with the exemption of political appointees.

Non-career officials must gain eligibility through required examination if they intend to keep their jobs in government.

BIR Sets Metro Reshuffle

2010-10-28T00:27:00.000-07:00

Source: www.mb.com.ph

Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto-Henares is set to reshuffle the agency's regional directors, district officers and division heads in Metro Manila and elsewhere before the end of November in what will be the first major reorganization or revenue officials since the BIR chief assumed her post four months ago.

Henares said yesterday the revamp could have been carried out earlier were if not for the recent barangay elections that prohibits the transfer and reassignment of national and local government personnel.

She described the revenue officials to be affected by the revamp as frontliners in the government's tax campaign which aims to raise P860 billion this year.

Henares said the reorganization takes into account the Lateral Attrition Law (LAL) or the grading of officials based on their individual collection performance.

Whoever gets high grades in other key performance indicators (KPI) will also be considered such as in the aspects of honesty, integrity and programs undertaken to improve services to taxpayers, she explained.

Henares noted that it will be the first major reorganization that she is undertaking since she was appointed by President Aquino to the top BIR post.

A Gem in Public Service: A BIR Commissioner Who Can’t Be Pressured

2010-10-26T04:36:00.000-07:00

Source: www.manilastandardtoday.com

Insiders at the Bureau of Internal Revenue tell me of a P17-million tax case involving a movie and television celebrity. This is actually a drop in the bucket if we consider how much this celebrity and her family are making with all their television and movie appearances, not to mention commercial endorsements.

BIR Commissioner Kim Henares was ready to name the celebrity and make public this case when a senator, said to be very close to President Aquino, tried to intervene for Henares to reduce the tax payment. He even went reportedly as far as talking with the President about this case, who endorsed him to Executive Secretary Paquito Ochoa.

Reports have itthat Henares refused to budge, and instead gave a deadline for the payment. Otherwise, she would make the case public. The celebrity and her family, including the senator, had no choice but to comply.

If these reports are all true, then we have a gem in public service: a BIR commissioner who can’t be pressured. Credit goes to the President and to Finance Secretary Cesar Purisima for the appointment of Henares.

***

Embassy: US adds $800,000 for typhoon Juan victims

2010-10-25T03:48:00.000-07:00

Source: www.gmanews.tv

The US government is making available an additional $800,000 for victims of typhoon “Juan" (international code: Megi), Ambassador Harry Thomas Jr. said Sunday. This brings to $900,000 the aid the US has made available for the typhoon victims, Thomas said. “[The US government] is pleased to make additional resources available to assist in the early recovery of those affected by typhoon Juan," Thomas said in a statement posted on the US Embassy’s Facebook page.

On Tuesday, Thomas announced the US was making available $100,000 in aid to victims of “Juan," which barreled through northern Luzon last week. The money for typhoon victims will be coursed through the Office of US Foreign Disaster Assistance of the US Agency for International Development, Thomas said. Apart from the financial contribution, US military personnel in the country gave the Armed Forces of the Philippines (AFP) logistical support in delivering relief goods to typhoon-stricken communities. Since Wednesday, US military personnel supported the AFP with aerial assessment of northern Luzon and in delivering over 170,000 pounds of relief supplies and transporting over 180 personnel to help with relief efforts in northeastern Luzon. “As a longstanding friend and ally of the Philippines, our military is proud to work side by side with the AFP to address the needs of the communities affected by the typhoon," Thomas noted. Damage to agriculture As of Friday, the Agriculture Department reported that typhoon Juan damaged the infrastructure and agriculture sector in northern Luzon to the tune of P8.49 billion, Agriculture Department Assistant Secretary Dennis Araullo said. Some P1.29 billion worth of agriculture facilities were damaged, the bulk of which were irrigation facilities, farm-to-market roads, and fishery and livestock infrastructure. Losses in the rice sector were the biggest at P6.02 billion, followed by high-value commercial crops (P660.3 million), fisheries (140.08 million), and livestock (P10.59 million). Typhoon Juan damaged 317,111 hectares of rice fields resulting to the loss of 353,415 metric tons (MT) of palay in 18 provinces in northern Luzon, according to the Agriculture Department. A total of 26,931 MT of corn planted to 15,886 hectares were damaged. Also destroyed were 23,364 MT of vegetable and fruits in 6,910 hectares. Losses sustained by the livestock and fisheries sectors amounted to P10.59 million and P140.08 million, respectively. The typhoon affected 19 provinces in Regions I, II, and III and Cordillera Autonomous Region. Pangasinan and Isabela provinces suffered the biggest losses estimated at P2.36 billion and P1.25 billion, respectively. — JE/VS, GMANews.TV

PASSAGE TO NAGUILIAN

2010-10-22T06:47:00.000-07:00

RDO Agraam announces over DWDY & DZNC last 16th October 2010:

1. All Sections "IN" Naguilian effective 11th October 2010 because it is finally ITS ready;
2. BIR Isabela's own 2010 CSC Pagasa awardee Miriam P. Ventura; and
3. Collection performance and other updates.

PASSAGE TO NAGUILIAN

By Ivy L. Bello

(Member, RD-15 Writers' Bureau)

Published in "The Valley Times" September 2010

If we may say so, we would like to dedicate this article to our regular readers and beloved taxpayers who have patiently endured with us since we have transferred to our new office building in Naguilian, Isabela barely two months ago. Needless to say, we are very hopeful that this article will serve as an eye-opener and help our readers and taxpayers understand the hassles and troubles being encountered by our office, Bureau of Internal Revenue, Revenue District Office No. 15, Isabela, while transferring to our new building.

FINDING A NEW HOME

Since we started reporting in our new building, there were several problems experienced by most of the personnel which made normal operation and function of our office quite difficult for most of us. Since the bureau established an Integrated Tax System (ITS) way back in 1994 intended to boost revenue collection and improve taxpayer service, majority of the bureau’s transactions require internet connection. One of the major problems we are encountering until now is the unavailability of internet connection in our new building, thus, we had to leave one of the most frequently visited sections in our office behind, which is the Taxpayers Service Section (TSS). Aside from handling the Registration Information Update and Registration of Books and Accounts, the TSS is also in-charge of the Application for Taxpayer Identification Number (TIN), Authority to Print Receipts and Invoices, Permit to Adopt Computerized Accounting System (CAS), Permit to Use Cash Register Machine (CRM) and Point of Sales Machine (POS) and Certificate of Registration. Despite the seemingly immense setback of not having an internet connection, we continuously make an effort to provide admirable services to our beloved stakeholders. Personnel belonging to the TSS created a mobile office that provides services to our taxpayers whether they are in the Ilagan or Naguilian office. While majority of the transactions that require internet connection are still processed in the old Ilagan office, taxpayers can already forward necessary documents and claim there TIN and COR at the Naguilian office, provided they have submitted the complete requirements. Nonetheless, we are very optimistic that the internet connection will be installed in our new building soon. As of October 4. 2010, Globe Telecom, our internet service provider has assured us of our access to the internet within 10 days or right after the cell tower needed for wireless internet connection is installed.

Aside from the unavailability of internet connection, we also have to withstand the tremendous heat in our new building brought about by the limited power supply. As of the moment, our building is using a single-phase power supply, which can only provide power to small electrical appliances. But regardless of the discomfort, we make sure that we still give commendable services to our dear taxpayers. Until the electric poles that will support the three-phase power lines needed by our new building are put up, personnel of RDO 15 and our taxpayers have no choice but to put up with the condition. But nevertheless, we are always ready to give our warm and friendly smile to our dear taxpayers no matter how hot the weather may be.

Looking at the brighter side of things, we are very glad to inform you that the water supply in our new building has already been installed. Finally, after one and a half months of waiting, our thirst for clean and fresh water has already been quenched. Our concern for clean and hygienic restrooms not only for us but most especially for the hundreds of taxpayers who visit our office everyday has already been acted upon and we are very grateful for that.

MAKING THE IMPOSSIBLE POSSIBLE ... HITTING THE GOAL AND MANY MORE!

Transferring an office composed of about 70 personnel, not to mention the hundreds of thousands of important files and documents to a new building is not a simple task. Despite the drastic changes and inconveniences brought about by our recent transfer to our new office building, we made it a point to never lose focus on our mission, which is to collect taxes for the government. We are very proud and happy to inform you that we still managed to meet our goal. For the month of August 2010, our goal was set at P123,753,000.00, while our actual collection was P130,405,054.00 (Note: the August goal was raised from 105M to 123M during the 1st week of August due to the adjustment in the BIR Goal, this is our 2nd biggest monthly goal for 2010). Compared to our actual collection the previous year of P94,559,623.68, we had an increase of 37.91%. For the month of September 2010, our goal was set at P91,917,000.00, while our actual collection was P92,887,495.42. Compared to the actual collection last year of P74,475,902.30, we had an increase of 30.65%. We are very optimistic that with the joint effort of every personnel of RDO 15, we will continue to beat our goal until the year ends.

Through the initiative of our very supportive and dedicated Revenue District Officer, Dra. Nerissa C. Agraam, our office has come up with different schemes to boost tax collection. We believe that it is very important to educate and inform the people of their obligation to pay their taxes promptly. As early as last year, our office, launched our radio program at Bombo Radyo entitled Handang Maglingkod, BIR Isabela, wherein we tackle issues which we think are relevant and beneficial for our taxpayers. Fortunately, we are already on our 2^nd season. Our passion in disseminating information paved the way for the creation of the Writer’s Bureau whose primary agenda is to educate and enlighten taxpayers this time through print media. It is because of this undertaking that we have our regular column in this newspaper. The Writers' Bureau is composed of personnel from RDO 15, namely, Mrs. Gladys B. Garcia, Chief, Taxpayers Service Section, Revenue Officers Rene Tangonan and Marianne Biado and yours truly, Mrs. Ivy L. Bello, nevertheless, all personnel who want to share their thoughts and expertise on tax related issues are encouraged by RDO Agraam to come up with their own write up. It is important to know that such an endeavour is the first of its kind in the history of the Bureau of Internal Revenue (BIR). We are very proud and happy to inform you that last August 10, 2010, RDO Agraam received a memorandum from no other than the Commissioner of the Bureau of Internal Revenue, Kim Jacinto-Henares commending and appreciating our office for the creation of the Writers' Bureau. And for this, we will be forever grateful to our beloved RDO Agraam for giving us the break and the opportunity to enrich, hone and make use of our talent in writing.

ENFORCEMENT ACTIVITIES

In our desire to boost revenue collection, we have already done all possible enforcement activities in the province of Isabela. We have conducted Tax Compliance Verification Drive (TCVD) in two cities and four municipalities in Isabela namely Santiago City, Cauayan City, Roxas, Cabatuan, Ramon and San Mateo in only a span of three months. It is important to know that it was the effort and initiative of RDO Agraam to inform the mayor of the city or the municipality for the 1st round of TCVD. It was also her idea to announce the first round of TCVD to give our taxpayers longer time to report their income tax liabilities freely and voluntarily. With the help of our Revenue Collection Officers (RCOs), radio program at Bombo Radyo and column at The Valley Times, the first round of TCVD conducted in these cities and municipalities were widely announced and publicized. In line with the BIR effort to encourage voluntary compliance , RDO Agraam believes that voluntary tax compliance should be implemented upon taxpayers who are willing to pay their taxes promptly. While enforced tax compliance shall be applied on taxpayers who deliberately violate their tax obligations. It is for this reason why the 2^nd and 3^rd rounds of TCVD will come as a SURPRISE to our taxpayers. In line with the BIR OPLAN KANDADO Program which allows temporary closure of businesses proven to have violated tax laws, we have also conducted surveillance operations on business establishments in the cities of Santiago and Cauayan. This was to determine whether business establishments in these areas have complied with the essential tax requirements such as issuance of receipts, filing of returns, declaration of taxable transactions. This year, we have padlocked one tax-erring establishment in the province of Isabela. The Ecstasy Drive-in Hotel in Cauayan City was temporarily closed due to under-declared tax sales. Rest assured, that we will continue to intensify our efforts to admonish and apprehend taxpayers proven to have violated tax laws.

Bagong gusali ng BIR sa Isabela nawasak sa Bagyong Juan

2010-10-21T15:53:00.000-07:00

Source: www.rmnnews.com

HINDI nakaligtas sa hagupit ng Bagyong Juan ang isang bagong tayong tatlong palapag na gusali ng Bureau of Internal Revenue (BIR) sa bayan ng Nagillan sa lalawigan ng Isabela.

Sa Report ni Conrad Delos Reyes ng Radyo Mo Nationwide Isabela sinabi nitong wasak na wasak ang mga gamit ng BIR Buildng bagamat aniya nakatayo pa rin ang instruktura ng nasabing tanggapan.

Hindi naman maitago ng Revenue District Officer na si Ginang Nerissa Agraam ang matinding pagkalungkot sa sinapit ng pinaglilingkurang ahensya sa bangis ng bagyo lalo pa’t mag-iisang buwan pa lamang aniya itong napapakinabangan.

Samantala, tiniyak ng opisyal na magtutuluy-tuloy ang kanilang serbisyo sa kabila ng pangyayari.

6 na ang patay sa Isabela; ilang barangay isolated pa rin - gov

2010-10-21T03:18:00.000-07:00

Source

CAUAYAN CITY, Isabela - Anim na ang kumpirmadong patay sa Isabela sa paghagupit ng super typhoon Juan.

Sa nakuhang impormasyon ng Bombo Radyo Cauayan mula kay Provincial Social Welfare and Development (PSWDO) officer Lucila Ambatali, kinilala niya ang namatay na sina Jeremiah Villena, pitong taong, residente ng Carmencita, Delfin Albano, Isabela.

Hindi pa malinaw kung ang bata ay namatay sa pagkalunod o nadaganan ng gumuhong bahay o punongkahoy.

Sa Roxas, Isabela ay isa ang nasawi matapos tamaan ng yero ang leeg ng isang lalaki.

Nakilala ito na si Guilberto Sumera Ulep, 34, at residente ng Brgy. Simimbaan, Roxas, Isabela.

Ang pagkasawi ni Sumera ay hindi pa nakakarating sa Provincial Disaster Coordinating Council ng Isabela.

Ang isa pang nasawi ay mula sa bayan ng Sta. Maria, Isabela.

Samantala, iniulat ni Gov. Faustino "Bogie" Dy III na may tatlong namatay sa bayan ng Maconacon, isa sa mga coastal towns ng Isabela.

Ang dalawa ay namatay makaraang magkaroon ng storm surge habang ang isa ay nadaganan ng bumagsak na punongkahoy.

Isa ring guwardiya ng provincial capitol sa Ilagan, Isabela ang nasugatan nang tamaan ng mga nabasag na salamin dahil sa malakas na hangin.

Ang gusali ng Isabela Provincial Capitol ay hindi nakaligtas sa bagsik ng bagyong Juan.

Nabasag ang maraming glass panel nito at nasira ang ilang kagamitan ng provincial treasurer's office sa first floor nang pumasok ang tubig at tumulo sa sa opisina ng Provincial Planning and Development Office (PPDO) sa 2nd floor.

Ang bubungan ng municipal building ng Benito Soliven, Isabela ay inilipad ng malakas na hangin.

Ang tatlong palapag na bagong gusali ng Bureau of Internal Revenue (BIR) sa Ilagan, Isabela ay hindi rin nakaligtas sa lupit ng bagyo.

Sinabi ni Revenue District officer Nerissa Agraam na lubha silang nalulungkot sapagkat nasira ang kanilang mga computer at records dahil pumasok ang tubig sa loob ng gusali matapos masira ang mga glass panel.

Isolated naman ang ilang barangay sa Ilagan, Isabela at marami pang barangay sa 1st at 2nd district ng Isabela na lubhang tinamaan ng malakas na hangin at ulan dahil sa pagtaas ng tubig sa mga sapa at ang napakaraming natumbang mga punong kahoy na nakahambalang sa mga daan.

Nagtutulungan na ang mga tauhan ng DPWH, Philippine Army at Philippine National Police sa clearing operation ngunit hindi nila kaagad mahawi ang maraming natumbang punongkahoy sa mga barangay sa dahilang inuuna nila ang mga national at provincial roads.

Bukod sa mga gusali at bahay na nawasak ay marami ring eskuwelahan ang napinsala tulad ng paaralan sa Dibuluan, San Mariano, Isabela na gumuho dahil sa pagtaas ng tubig sa kalapit na sapa.

Marami ring community center sa mga bayan sa ikalawang distrito ang nawasak tulad sa Guibang, Gamu, Isabela na parang nilamukos na papel ang community center at poste na lamang makikitang nakatayo.

Marami ring pamilya ng mga sundalo sa 5th Infantry Division Philippine Army sa Camp Melchor dela Cruz , Upi, Gamu, Isabela ang lumikas sa ligtas na lugar matapos mailipad ang bubungan ng kanilang mga housing units sa loob ng kampo.

Patuloy ang relief operations ng mga local government units sa mga libu libong residente na labis na naapektuhan ng bagyo sa maraming bayan lalo na sa 1st at 2nd district ng Isabela.

Nagtungo na sa coastal towns ng Isabela si Gov. Dy para magsagawa ng occular inspection upang malaman ang lawak ng pinsala sa mga bayan ng Palanan na naging sentro ng bagyo, Divilacan, Dinapigue at Maconacon

IMF keeps tabs on Philippines' BIR

2010-10-14T06:20:00.000-07:00

Source: www.abs-cbnnews.com

The United States has tapped the International Monetary Fund (IMF) to closely watch the progress of reforms in the Philippine Bureau of Internal Revenue (BIR).

The Millennium Challenge Corporation (MCC), which doles out development grants under the auspices of the US State Department and the IMF, recently signed a partnership agreement to provide capacity-building support for the reform and modernization of tax administration in the Philippines.

An MCC statement pointed out this was the first time such a partnership has been forged between the US government and IMF.

The MCC said $4.6 million from the $434 million compact grant for the Philippines will be used to pay for technical assistance from the IMF’s Fiscal Affairs Department.

While the bulk of the MCC compact agreement will go to poverty-alleviation, road-building and livelihood projects, more than $54 million was also earmarked to computerize and streamline the BIR’s operations that is designed to go after tax cheats and improve collections.

Under the agreement, the MCC will pay for a “resident advisor” to be posted with the BIR as well as a “significant number of short-term technical assistance missions by IMF experts."

The MCC said it expects the IMF will be able to send an assessment mission to Manila next month and deploy the “resident advisor” to the BIR before the end of the year.

The Philippine’s quest for an MCC Compact grant had been mired by repeated failure of the administration of former President Gloria Macapagal Arroyo to pass the agency’s “corruption test."

President Benigno Aquino III has made fighting graft and corruption one of the pillars of his administration, but there are still lingering doubts that he will be able to deliver on that promise.

The BIR had often been seen as one of the most graft-prone agencies in the Philippines. The World Bank, IMF and other international financial organizations have often cited the need for the government to plug loopholes in revenue collections so the Philippines can raise enough money to pay for expanding basic services and development.

The MCC said it expected to get the first IMF report on BIR reforms in early 2012.

The partnership agreement was signed by Murillo Portugal, IMF Deputy Managing Director, and Patrick Fine, MCC Vice President.

“The agreement will serve as a solid foundation for success in reforming the Philippines Bureau of Internal Revenue as was as a solid foundation for productive collaboration between the IMF and MCC,” Fine said.

No Extension for Abatement Program Deadline, says BIR

2010-10-08T22:09:00.000-07:00

By CHINO S. LEYCO

Source: www.mb.com.ph/

The Bureau of Internal Revenue (BIR) announced yesterday that it will not extend the October 29 deadline of its abatement program that waives surcharge on delinquent taxpayers.

Revenue Commissioner Kim S. Jacinto-Henares said delinquent taxpayers availing of the program before the deadline would no longer have to pay a surcharge ranging from 25 percent to 50 percent over their basic tax arrears.

“Personally, I am not in favor of extending the abatement program. Taxpayers have to avail it on or before October 29,” Jacinto-Henares said in an interview.

She explained the abatement program is not her priority and not a revenue-raising measure.

“This is really giving the people the opportunity to do what is right,” Jacinto-Henares said.

The BIR collects a 25 percent surcharge on taxpayers who voluntarily file their late returns and charges a higher surcharge of 50 percent on those found guilty of tax evasion.

The abatement program is being implemented in line with the Run After Tax Evaders (RATE) program, in order to prevent tax evasion practices and to encourage voluntary compliance with the internal revenue laws.

“Those who weren’t able to file their returns on time have an opportunity to do so. But if they already have the letter of authority from us, then they may not avail of the abatement. We will still, however, continue to collect the 20-percent annual interest on the back taxes,” Jacinto-Henares said.

The letter of authority is an official document that empowers a revenue officer to examine and scrutinize a taxpayer’s book of accounts and other records in order to determine the taxpayer’s correct internal revenue tax liabilities. The issuance of the letter of authority to a taxpayer signals the start of the audit process.

“It is the obligation of the taxpayer to ensure the returns they file are correct. Otherwise, we would still collect surcharge on the primary tax deficiency on top of the interest,” she said.

“When we file a tax evasion case, there’s no compromise on the criminal case. As far as we’re concerned, this is requiring you to pay your tax obligations. If you pay it right, you will no longer have a criminal case, it is enough that you paid taxes,” the official added.

In 2007, the BIR yielded P3 billion from an abatement program.

Plunder case vs. Arroyo not for BIR -- commissioner

2010-10-07T06:32:00.002-07:00

By Tetch Torres
INQUIRER.net

The plunder case against former President Gloria Macapagal-Arroyo was not yet a matter for the Bureau of Internal Revenue (BIR) to get into, Commissioner Kim Henares said.

Arroyo’s plunder charge was in connection with the sale of the old Iloilo Airport three years ago to a private corporation. The former president was also accused of failing to pay the appropriate taxes for the transaction.

Henares cited a legal opinion issued before, which said that when government sells properties it was not subjected to capital gains tax.

“So, until and unless there are reasons to overturn that opinion, there is no basis for us to look into it,” Henares said.

The transaction involved the 2007 sale of the 54.5-hectare old Iloilo airport for P 1.8 billion in 2007 to Megaworld Corp.

Danilo Lihay-lihay, president of Philippine Association of Revenue Informers Inc., said the Arroyo administration paid P18 million-worth of documentary stamp tax for the sale but did not remit the P72 million capital gains tax it collected.

“There was no capital gains tax being collected because of the government opinion. So, from day one, there is no capital gains tax. There is nothing to remit. Let’s say if the airport is owned by the national government, then it goes to the national treasury. It if is owned by the local government, it goes to the local treasury, nothing goes to the BIR,” Henares said.

“It is a totally different matter if they sold it to us, say, P100 milion but remitted only P90 million. That is a different issue. That is not for the BIR. It is an Ombudsman issue,” Henares said.

AMLC powerless vs 'jueteng' operators

2010-10-01T06:52:00.000-07:00

By Christina Mendez (The Philippine Star)
Source

The Anti-Money Laundering Council (AMLC) yesterday admitted it is helpless in going after big-time illegal gambling operators since no criminal cases have been filed.

AMLC secretariat officer Richard David Funk II said efforts to go after the bank accounts of suspected jueteng and masiao operators are difficult as law enforcement agencies have failed to file criminal cases against them.

Funk made the revelation during the second hearing of the Senate yesterday on the proliferation of jueteng.

Although Senate President Juan Ponce Enrile argued that the AMLC has the power to file a case and prove the existence of probable cause without police help, Funk said their hands were bound by a Supreme Court decision that requires the AMLC to inform a suspect beforehand that the council is looking into his account.

“We are empowered only insofar as the money laundering aspect,” Funk told the Senate Blue Ribbon committee members led by Sen. Teofisto Guingona III.

Funk said the AMLC could proceed to file a case if there is probable cause to freeze the assets of the suspect.

Asked why the AMLC did not act on leads provided during Senate public hearings and on news reports that illegal gambling operators have stashed high value assets abroad, Funk quoted Enrile himself as saying some five years ago that “all those exposés are hearsay; how can that constitute probable cause in a court of law?”

Enrile later said the AMLC should have followed up the leads from the current exposes and Senate investigations.

“We have been looking into jueteng lords your honor since the time of the creation of the AMLC,” Funk assured.

Bureau of Internal Revenue deputy commissioner Estela Sales also told the committee that they took the initiative to check out the assets of suspected jueteng operators.

Sales said the BIR has started checking the tax compliance and records of the persons named by retired archbishop Oscar Cruz and in the privilege speech of Sen. Miriam Santiago.

“Since these people are engaged in unauthorized form of gambling, they would not normally report any income derived from illegal activity… so we are using the net worth or expenditure method,” Sales said.

“We started and we shall continue, except that we are encountering roadblocks since the names that we were given are aliases and pseudonyms,” she added.

Watchlist

Guingona led the Senate Blue Ribbon committee in delving into the revelations of Cruz and Santiago in naming some personalities allegedly receiving payoffs from illegal gambling operations.

At the same time, Guingona called on the Bureau of Immigration to put former national police chief Jesus Verzosa in the watch list for failing to attend the last two hearings over the issue.

Verzosa was among the personalities named by Santiago.

Verzosa’s camp, however, said the former national police chief was in Singapore when the Senate notified him.

Verzosa had submitted the letter along with two folders of documents in explaining how he had tried to address the problem of jueteng during his term.

Businessman Antonio Cojuangco also submitted a letter to the Blue Ribbon committee denying the allegations made by Cruz against him.

Even while Guingona was keen on having Verzosa at the Senate hearing, he took it easy on Interior Secretary Jesse Robredo during yesterday’s hearing.

Guingona noted the statements of Robredo tasking Interior Undersecretary Rico Puno and Verzosa to intensify the campaign against jueteng.

Robredo told the committee that he was personally directed by President Aquino to address the problem of jueteng.

Robredo also defended Verzosa and Puno on allegations that they were on the take.

When asked by the committee on what he had done following the allegations, Robredo said he ordered an investigation and confronted Puno who denied the allegations.

“We were being tagged that we were part of the jueteng payola, and there were certain names that were mentioned. I wrote them, I told them that if you won’t do something people might tend to believe these reports,” Robredo said.

Robredo said he had an agreement with Puno to address the issue and urged Napolcom to suggest a better option to address the jueteng problem.

“Probably like most of us, you go to a blank wall. Aside from the reports that have been received, aside from the news clippings, it’s essentially what they say, there are no evidence, no hard facts to prove these allegations,” Robredo said.

During the hearing, Guingona ordered the issuance of invitations to the people mentioned by Cruz and Senator Santiago “so that they can air their side.”

Guingona said the resource person could merely send a letter to explain their side.

Sen. Gregorio Honasan, chairman of the committee on public order and illegal drugs, took the opportunity to call on PNP chief Director General Raul Bacalzo to submit recommendations on how to address the problem on jueteng.

Bacalzo told the committee that gambling operations other than jueteng have gone down to about 50 percent, citing reports from ground commanders.

He said jueteng operations were reduced by about five to seven percent following the exposes.

Sen. Ferdinand Marcos Jr., on the other hand, said there is a need to dismantle criminal organizations that operate illegal gambling before taking on the proposal to legalize jueteng.

“It is absolutely imperative that we continue to the very end, and we can say in good conscience that we have examined everything, turned every rug… talked to every witness,” Marcos said when Guingona ventured on asking Robredo on how to address the problem of jueteng.

“More and more we want to hear the various methods in making legal the illegal numbers game,” Marcos said, stressing his stand that there is a need to continue with the hearings beyond discussing the merits of legalization of jueteng.

Robredo defended the operation of Small Town Lottery (STL), pointing out the lottery draw is the only viable alternative of the government to neutralize the illegal numbers game.

“Between the time that it was legalized and now, I think we should come out with a better STL and work on it,” Robredo said.

“With the enforcement of STL, I don’t think we need to legalize jueteng,” he said.

Robredo recommended the STL should be localized in the municipal and city level and just give royalty to the Philippine Charity Sweepstakes Office (PCSO). – With Jess Diaz, Cecille Suerte Felipe, Eva Visperas, Ric Sapnu, Teddy Molina

BIR to consumers: Demand receipts always

2010-09-28T08:03:00.000-07:00

Source: www.pia.gov.ph

The Revenue District Office of Isabela is continuously reiterating to the public to ask officials receipts every time they purchase goods from any business establishments or in paying utility service offices in their respective places.

In their regular radio program, Taxpayer Section Head of BIR Isabela Ms. Gladys Borromeo is urging the public to ask official receipts as these can also be used as proof that the business establishment is issuing receipts and these can also be used to the BIR promo "Instant Premyo sa Resibo".

The promo will entitle the receipt holders a chance to win cellphone loads and cash prizes including car and a P1 million instantly when electronically raffled and pick the names of the receipt holders.

Officials receipts should bear the name of the business establishment, address, proprietor and business owner's Tax Identification Number (TIN).

Borromeo said receipts with total amount of P100 can be regarded as single entry while P200 up will be regarded as multiple entry in the electronic raffle.

Participating receipt holders must type the following to become instant winner when luckily pick in the electronic raffle: PSR (space) Tax Identification Number or TIN of business owner (*) Official receipt Number (*) amount and send to 9777 for single entry and 9778 for multiple entries. P2.50 will be charged per entry.

After texting the entry, immediately a message will inform the participant if won the following prizes: P30 cellphone load; P5,000 cash; a car or P1 million.

Winners of P30 load will automatically added to load balance while winners of P5,000, car and P1 million will be notified and called up by PSR representative on how to claim the prizes won.

The Premyo sa Resibo promo aims to increase the agency's tax collections to fund the numerous programs and projects of the government and to increase awareness of the public on the benefits of asking receipts every time they buy or pay not for the prizes sake but for the welfare of the people. (PIA Isabela)

BIR Trains guns on online traders

2010-09-21T07:42:00.000-07:00

Source: www.manilatimes.net

THE Bureau of Internal Revenue (BIR) said it will look into taxing online buy-and-sell transactions to help plug the government’s huge budget deficit. In a phone interview Sunday, Commissioner Kim Jacinto-Henares said the BIR will conduct a series of dialogues with online buy-and-sell website administrators to remind them that users of their websites, particularly those engaged in selling products, would have to be taxed for every product sold.

“We are going to conduct a series of meetings with online selling administrators and inform them that they should only allow sellers [to use their websites] who have tax identification numbers (TIN), and that those who close a deal online would have to declare to us to enable us to charge them the corresponding taxes,” Jacinto-Henares said.

The BIR chief admitted having bought a product online.

“Legally, we need not do anything to impose on these sellers the duty to disclose their transactions for us to determine the corresponding taxes that they should pay. But it is not happening. Thus, we have to be more aggressive in implementing what the law provides,” she said.

Under the National Internal Revenue Code, sold goods worth at least P25 should be accompanied by invoices, and in turn disclose all the legitimate expenses so the BIR could determine the amount of tax that would have to be paid.

The BIR chief said the agency will sit down with the administrators of sulit.com.ph, e-bay Philippines,alibaba.com, ayosdito.ph and multiply.com.

“Those sellers who do not give their TIN, which amounts to avoiding payment of taxes should be barred from using these websites.

That’s the message that we want to emphasize to those administrators,” Jacinto-Henares said.

While in an ideal environment the bureau may only rely on the “obedience” of the taxpayers in following the law, “unfortunately, that has yet to be the case—that culture shall still be developed—hence, we have to do certain actions to implement the law,” she said.

With respect to facebook.com, which is likewise being used by some of its members for selling and purchasing products, Jacinto-Henares said, “That one is much more difficult to track, I cannot friend all those in there to monitor their transactions. But we will find a way.”

At end-August, the BIR, which accounts for two-thirds of the government’s income, generated P546.4 billion in revenues, or 9.1 percent more than the P500.8 billion collected in the same period last year. However, the agency’s collection was still 5.5 percent below its eight-month target this year.

Jacinto-Henares however expressed confidence that with the start of the Christmas season in September, the bureau would begin meeting its monthly targets.

Freezer for BIR Men who Miss Targets

2010-09-21T06:02:00.000-07:00

Source: www.mb.com.ph

Regional directors, district officers and other key field officials of the Bureau of Internal Revenue (BIR) who failed to hit their collection targets will be relieved from posts to undergo "retraining."

This was disclosed on Tuesday by Revenue Commissioner Kim S. Jacinto-Henares as she prepares massive nationwide personnel changes to arrest the increasing collection deficits.

The BIR chief said the new travel assignment order will be released within the next two weeks.

“Those who failed to meet targets will undergo retraining and they will be replaced by others who can do the collection job better,” she said, reiterating that the revamp will be based purely on merit and not on the “palakasan,” or “padrino” system.

BIR insiders said retraining means transfer to freezer positions.

Records showed the BIR has sustained more than P31-billion collection deficits during the first eight months of the year. But Henares expressed optimism that more funds will be raised if the men and women in the bureau stay focused on their jobs.

“While the original target of P830 billion is still achievable, we will still strive and continue to do our best to meet the revised target of P860 billion by yearend," she said.

Fiscal data released moved to Monday

2010-09-18T03:27:00.000-07:00

Source:www.bworldonline.com

RELEASE OF the country’s fiscal report for August was on Friday deferred to Monday next week as the government’s expenditures report is still being finalized, a senior official said.

"[We are] reconciling numbers with DBM (Department of Budget and Management) on expenditures," National Treasurer Roberto B. Tan told BusinessWorld in a text message when asked why the report’s release did not push through as scheduled.

In another text message, Mr. Tan said: "Revenues, okay. Expenditures, almost final."

The Aquino administration is expected to announce another deficit after the two main revenue agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC), earlier this week said they had missed their August collection targets.

The BIR, which accounts for around two-thirds of the government’s tax earnings, last Wednesday said it was 12% short of its P89.8-billion target for August. This widened the bureau’s shortfall to P32 billion, with the agency having collected P546.4 billion in the eight months to August out of its goal of P578 billion.

On Thursday, meanwhile, Customs Commissioner Angelito A. Alvarez said his bureau was 20% short of its collection goal last month. He did not provide details. The BoC’s August target is P23.5 billion.

The bureau netted P153 billion as of July, exceeding its P150.2-billion target but cash collections only amounted to P133 billion. The rest came from the government’s Tax Expenditure Fund, where the payments for state imports are sourced.

The Aquino government incurred a P32.7-billion deficit in July, its first month in office, raising the overall shortfall to P229.4 billion. It is aiming to keep the budget deficit capped at a record P325 billion. -- P. P. Magtulis

BIR Conducts Major Personnel Changes; Sets Revamp Next Month

2010-09-17T03:08:00.000-07:00

Source: Manila Bulletin

Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto-Henares conducted Wednesday a major personnel changes, her first since she assumed the top BIR post more than two months ago. She said more field officials will be reshuffled next months as part of a bigger program of strengthening the tax collection and administration system to boost the chances of hitting this year's P860-billion collection target. The initial revamp covered officials holding positions from regional director to revenue district officer (RDO) and division chief. They included Quezon City Revenue Regional Director Antonio Montemayor who was transferred to the Taxpayers Assistance Service. Montemayor who is suffering from a serious illness had earlier sought an early retirement. Manila Assistant Revenue Regional Director Tess Dizon replaced Rey Asterio Tambis assistant chief of the Large Taxpayers Service (LTS) who also applied for an early retirement. The LTS collects more than 60 percent of the annual total take of the BIR and handled the investigations of the country's more than 1,000 top corporations. Revenue District Officers assigned in Bulacan and Angeles city were replaced by their assistants after applying for an early retirement. "I can't stop them from leaving the bureau," said Henares. Many of those who were given new assignments were chief and assistant chiefs of tax fraud divisions in various regional offices like those in Manila, Quezon city, Makati, Caloocan, the Cordillera Autonomous Region, Pampanga, Pangasinan, Bicol, Southern Tagalog, Leyte, Iloilo, Cagayan de Oro and Zamboanga. Informed sources said many RDOs in Metro Manila and elsewhere will be the next recipients of new travel assignment orders. The BIR's 124 RDO are considered frontliners in the collection of internal revenue taxes. Henares said earlier she will replace RDOs who failed to hit their targets during the last few months. Records showed the BIR sustained more than P21-billion collection deficits during the first eight months of the year.

Lifestyle monitors ferret out tax cheats

2010-09-14T06:55:00.001-07:00

By Cecil Morella
Agence France-Presse
Source

On slow days tax investigators say they comb through the obituary pages and stacks of sales invoices. On other days they get lucky and get to track the infrequent Porsche or Ferrari.

The poorly paid accountants and lawyers are the unlikely shock troops of President Benigno Aquino III's anti-corruption campaign, exposing to public shame those accused of cheating the government out of billions of dollars in taxes.

Rewards are few and the threat to life and limb is ever present, but the "Run Against Tax Evaders" team of the Bureau of Internal Revenue is fuelled by civic duty, said its chief prosecutor Claro Ortiz.

"It's very exhausting and very dangerous because, you know, we tend to run after big names and big people. There is, of course some sort of risk," he said.

His 28-member special team of lawyers is currently handling 155 cases, including that of a pawnbroker who imported a half million-dollar Lamborghini even though he had paid just$ 600 in taxes in the past 10 years.

A luxury car dealer is also in trouble for allegedly cheating the government out of P68.4 million ($1.52 million) in duties for a fleet of Lamborghini, Porsche, Mercedes Benz, and Maserati imports.

It would take the 49 year-old Ortiz, a father of three, as many more years to earn enough money for a Lamborghini for himself, but he is not fixated on the yawning wealth gap.

"We are some sort of a crusader. We try to correct what is wrong," he added.

Kim Henares, Ortiz's boss as head of the Bureau of Internal Revenue, estimates just five million of the 38 million working-age Filipinos pay taxes, leaving more than 22 million potential tax dodgers.

This has left the Philippines with a wafer-thin revenue base with which to fund its basic operations and provide social services. The government expects a funding gap of nearly P300 billion this year.

"We're so creative a race. If they see that they can get away with it, they will try to get away with it," Henares told AFP.

The thin ranks of Filipino taxpayers include 1.4 million who describe themselves as self-employed, who may include doctors and other professionals.

Finance Secretary Cesar Purisima suspects they may be paying far less than the government is due.

"Imagine if we can scare them enough to increase (annual) tax payments by P100,000 each. You do that math. That's 140 billion pesos," Purisima said, musing on the impact of the name-and-shame campaign.

"There is nothing wrong with buying luxury cars. Everyone has the right to enjoy their wealth. But the government also has the right to collect taxes and duties," Purisima added.

Getting Filipinos to pay the right taxes, however, can expose tax sleuths to danger.

Those in the firing line are the revenue bureau's 70-strong team of accountants and lawyers from the National Investigation Division that develops cases out of tips from citizens as well as regular taxpayer audits.

Two of the division's chiefs have been assassinated in the past decade.

The tax cheats often give themselves away by conspicuous consumption aimed at announcing to the world that they have arrived, according to a member of the division who asked not to be named.

The Lamborghini-borne pawnbroker accused of dodging taxes went around in vanity plates and frequented motor shows.

"If there is a report of a certain sale and apparently this was not reported, we would try to get documents from third-party sources," the source said.

"We pick our battles. We want simple cases," the investigator said. If the tax evasion case involves less than a million pesos, the group, which received some training in the United States, simply sets it aside.

The tax investigators also count billboards to compare the tax returns of movie stars and other celebrities to product endorsement contracts that they had signed.

But most of their work is routine reading, the source said, both of sales documents and even death notices on daily newspapers. Filipinos' creativity does not end in death, as most appear to evade death taxes.

In a sign that the investigators might be having an effect, however, Henares said at least one car dealer has privately complained to her about the impact of the campaign on luxury car sales.

BIR to implement abatement program starting this month

2010-09-10T17:43:00.000-07:00

Source: www.gmanews.tv

An abatement program that would waive surcharges on delinquent tax payments will be conducted by the Bureau of Internal Revenue (BIR) beginning this month to allow taxpayers to file and pay the correct taxes.

BIR Commissioner Kim S. Jacinto-Henares said in a press conference yesterday that the BIR is set to publish the revenue regulations for the abatement program for all tax types next week.

"We will publish the revenue regulations by next week. It will take effect 15 days after the publication," she said.

Finance Secretary Cesar V. Purisima said in the same event the abatement program which would run until October 29, is intended to give taxpayers a chance to declare and pay the correct amount of taxes due to the government. "There are many who say they really want to pay the correct tax, so we have agreed to give them until October 29 if they really want to comply," he said.

Under the abatement program, Ms. Jacinto-Henares said the 25% surcharge on the taxes due will be waived if the taxpayers would come forward to pay the correct amount of taxes or amend their tax returns. The due taxes, she said would have to be paid in lump sum.

She said the 20% interest of the tax due per year would still have to be collected by the agency. "The program is open for all tax types," she said.

Taxpayers which have been issued letters of authority, she said, would not be qualified to avail of the program.

A letter of authority is an official document that empowers a Revenue Officer to examine and scrutinize a taxpayer’s accounting records to determine his or her correct tax liabilities.

Ms. Jacinto-Henares said the waiving of surcharges is authorized under the National Internal Revenue Code (NIRC).

Under Section 204 of the NIRC, the commissioner has the authority to abate or cancel a tax liability.

Asked how much the BIR expects to collect from the abatement program, Mr. Purisima said the program is being implemented not to generate revenues. "This is not intended for revenue-generating. This is really for those asking for a chance," he said.

Tammy H. Lipana, chair of the tax committee of the Philippine Chamber of Commerce and Industry (PCCI), said yesterday that they welcome the abatement program. "That’s a welcome development for taxpayers with unpaid deficiency tax assessments and those who failed to file tax returns and paid the taxes due from them," she said in a text message yesterday.

For her part, Lina P. Figueroa, a principal at Punongbayan & Araullo said in a separate text message an abatement program from the BIR is "always a welcome development."

The last time the BIR had an abatement program was in October 2006 until March 2007 which covered all penalties, including surcharge and interest on delinquent accounts and on assessments -- preliminary and final, disputed or not -- as long as taxpayers pay 100% of the basic tax assessed.

The BIR is tasked to collect P860.4 billion this year. As of end-July, its collections amounted to P467.3 billion, lower than the P488.38 billion goal for the period. -- Louella D. Desiderio, BusinessWorld

BIR Examiners Banned from Helping Taxpayers

2010-09-10T04:32:00.000-07:00

Source: www.mb.com.ph

The Bureau of Internal Revenue (BIR) has banned its examiners from helping individual and corporate taxpayers in the preparation of their financial statements for submission to the agency, it was learned Friday.

Revenue Commissioner Kim S. Jacinto-Henares described the practice as "conflict of interests" and "disadvantageous to the government."

The BIR chief warned that she will file administrative charges and dismiss revenue officials and employees found doing the bookkeeping jobs of taxpayers.

Ms. Henares who is an old hand in the bureau being its assistant commissioner for large taxpayers service (LTS) few years ago before her recent appointment to the top post said some taxpayers seek the assistance of revenue fieldmen in the preparation of their books of accounts as well as the determination of their tax liabilities to avoid inconveniences from future BIR audit.

She said taxmen will naturally work for the interests of their clients by reducing their tax payments.

She said the anomalous transactions have been causing the government to lose huge amount in income and business tax payments for years.

This time, BIR lowers boom on resort owners

2010-09-09T18:58:00.000-07:00

By Nikko Dizon
Philippine Daily Inquirer

The owners of Club Manila East, a resort in Taytay, Rizal, were charged with tax evasion Thursday for failing to file accurate income tax returns for more than a decade.

The Bureau of Internal Revenue (BIR) also accused spouses Julio and Priscilla Cruz, of Barangay San Juan, Taytay, Rizal, of not submitting proof of the source of the “substantial” income they earned over the past 13 years.

BIR Commissioner Kim Henares said at a press conference at the Department of Justice (DoJ) that the couple would be made to pay income taxes amounting to P854.9 million.

The BIR filed the tax evasion charges against the couple in the DoJ, the seventh case to be filed under the agency’s Run After Tax Evaders (RATE) program of the Aquino administration.

Warning

“This case serves as a warning against the common practice of [businessmen] with very rich companies and yet the owners don’t file [their] income tax returns,” Finance Secretary Cesar Purisima said.

The BIR described Club Manila East as a “seven-hectare business and recreational zone” with branches in Boracay and Real, Quezon.

The BIR also filed tax evasion charges against Marieandy Fricke of Ayala Alabang Village, Muntinlupa City, and spouses Melito and Malisa Chua.

The BIR said Fricke and the Chuas committed the “brazen and deceitful act” of transferring a land title using a fake or falsified certificate authorizing registration and tax clearance certificate which were allegedly issued by the BIR.

By doing so, the three were able to evade the payment of the capital gains tax and documentary stamp tax.

Fricke and the Chuas owe the government a total of P7.45 million in deficiency taxes, including surcharge and interests, according to the BIR.

P783-M unreported income

The BIR said the Cruz couple filed an income tax return only for the P9.6 million in compensation they earned since 1999.

However, a BIR audit showed that the Cruzes had a total of P783.3 million in unreported income in the form of cash investments in two corporations from 1992 to 2004.

These were Manila East Holdings Corp. (Mehco) and JS Cruz Construction and Development Corp. (Cruzcon) in which the couple were both majority stockholders.

Paid up capital stocks, cash advances, and cash deposits for future subscriptions made up the investments of the Cruzes, according to the BIR.

The BIR has served the Cruzes several assessment notices.

Personal loans

In response, the couple admitted that they had substantial cash investments but explained that these came from personal loans advanced by Julio Cruz, personal loans he secured from private outside sources, and their accumulated savings.

“The spouses, however, miserably failed to present documents to substantiate their claims that the said cash amounts infused in two corporations were indeed personal loans,” the BIR said in a statement.

The agency said the investments were considered “unreported income” for which the Cruzes were liable to pay deficiency income taxes for the taxable years.

Deed of absolute sale

In the other case, the BIR said Fricke, of Ayala Alabang, Muntinlupa, owed the government P5.95 million and the Chuas, with address in Deparo, Caloocan City, had a tax liability of P1.49 million.

“The respective liabilities of Fricke and spouses Chua were based on their agreement as contained in the deed of absolute sale to which they were the signatories,” the BIR said in a statement.

Greenhills property

A BIR investigation showed that Fricke and the Chuas were parties to a transaction that involved the sale of a 1,209-square meter property, including its improvements, at Albany corner Nevada streets in Greenhills, San Juan.

The parties were able to effect the transfer of title to the property with the register of deeds in San Juan.

However, BIR investigators discovered that aside from not paying the capital gains tax and the documentary stamp tax, the parties also showed the register of deeds a falsified CAR and tax clearance certificate.

The case against Fricke and the Chuas was the sixth tax evasion case filed by the BIR under its RATE program.

Villarica

The first case was filed on July 15 against pawnshop owner William R. Villarica, who declared zero income in the same year he acquired a P26-million Lamborghini sports car.

On July 29, the BIR filed a tax evasion case against Dennis S. Masigan and his wife Natalie, president and corporate secretary of DSM Construction & Development Corp. (DSM), as well as DSM vice president for operations Eldrin M. Masigan.

On Aug. 12, the bureau filed tax evasion cases against China State Philippines Construction Engineering Corp. (China Philippines) and local printing company Grand C Graphics Inc.

On Aug. 26, the BIR filed a complaint against Macario Lim Gaw, owner of Mega Packaging Corp.

Seniors to pay VAT on utilities

2010-09-07T08:09:00.000-07:00

Source: www.mb.com.ph

Senior citizens will now be required to pay the 12 percent valueadded tax (VAT) on their water and electric bills.

The Bureau of Internal Revenue (BIR) came out on Monday with Revenue Regulation (RR) 8-2010 cancelling the privilege provided for in the old RR 7-2010.

BIR Commissioner Kim S. Jacinto- Henares said the new regulations will take effect 15 days after they is published in newspapers.

The BIR chief explained that the privilege was withdrawn to reduce government tax losses as a result of the implementation of the Expanded Senior Citizens Act of 2010.

Under the law, the elderly are not only granted 20 discount on purchases of wide range of goods and services, but are also exempted from paying the 12 percent VAT, thus bringing total discounts to 32 percent.

Under Section 5 of the senior citizens law, the elderly are granted special five percent discounts in their electric and water bills provided consumptions do not exceed 100 Kwh for electricity and 30 cubic meters of water per month.

The privilege is granted per household regardless of the number of senior citizens residing in the place.

As a result, senior citizens got a total discount of 17 percent on their electric and water bills.

But with the withdrawal of the 12 percent VAT exemptions these elderly will now be getting only 5 percent discount on their electric and water bills under the new regulations.

The RR was signed by Finance Secretary Cesar Purisima and recommended by Henares.

It was explained that except for electric and water bills, senior citizens will still enjoy the privileges of not paying VAT on their purchases.

To ensure the full entitlement of elderly to the discount prescribed under the law, sellers are precluded from billing any VAT to the senior citizens.

The sale to a senior citizen must follow the invoicing requirements prescribed under Revenue Regulations No. 16-2005.

If the seller uses a point-of-sale machine or a cash register in of lieu of the regular sales invoice, the machine tape must properly segregate the exempt sales from the taxable sales.

BIR ends confusion on issuance of audit notices

2010-09-07T07:49:00.000-07:00

Source: www.bworldonline.com

The Bureau of Internal Revenue (BIR) has lifted the suspension of issuance of electronic letters of authority (eLAs) which paved the way for the adoption of electronic system of generating and issuing letters of authority to taxpayers.

Under RMO 69-2010, the BIR has resumed issuance of eLA starting August 16, 2010.

It may be recalled that, prior to RMO 69-2010, the BIR issued Revenue Memorandum Circular (RMC) No. 56-2010, which discontinued the use of manual LAs for 2009 beginning July 1, 2010. Under RMC 56-2010, all manual LAs issued starting March 1, 2010 were to be replaced with eLAs.

On account of this issuance, a revenue officer (RO) who arrived at a taxpayer’s premises armed with a manual LA could be rejected by a taxpayer on the ground that the said LA was no longer valid and had no force nor effect, rendering the RO’s attempt at examining the taxpayer’s books illegal.

To add confusion, on July 12, 2010, this directive was temporarily suspended by RMC 61-2010.

During the period of suspension, taxpayers with manually issued LA could not invoke their right to refuse the investigation of the examiners.

It further indicated that, during the suspension of the applicability of eLAs, only the Commissioner of Internal Revenue could sign and issue and manual LAs starting July 1, 2010.

Now, to finally put such confusion to rest, Internal Revenue Commissioner Kim S. Jacinto-Henares issued Revenue Memorandum Order (RMO) No. 69-2010 on August 16 which lifted the suspension on the application of eLAs.

Accordingly, all LAs, whether manual or electronic, issued from March 01, 2010 covering cases for 2009 and other taxable years -- including LAs issued by the BIR Commissioner pursuant to RMC 61-2010 -- were to be replaced with the new eLA printed using BIR Form 1966.

This does not cover the verification of estate tax cases which shall continue to be authorized with a Tax Verification Notice (TVN) until December 31, 2010.

If there will be an assignment or reassignment of the case to another RO or investigating office, the taxpayer should expect to receive a serial-numbered memorandum of assignment (MoA) to authorize the transfer.

The BIR provided additional guidelines for the issuance of MoAs for the following cases:

assignment of another RO for the continuation of the audit/investigation of a case due to resignation/retirement/transfer of the original RO;

assignment to the original RO of returned cases by the reviewing office and reassignment to another RO of returned cases in case of resignation/retirement transfer of the original RO;

reassignment to another RO due to referral of the case to another investigating office;

one-time transactions; and

other protested cases/cases for reinvestigation.

All Tax TVNs/MoAs/Referral Memos issued from March 1, 2010 shall be retrieved and converted to the appropriate documents to be issued by the BIR.

But then again, taxpayer should not be confused nor should they be apprehensive in case ROs continue to conduct the audit under the old audit notice.

The regulations specify that though the replacement will bear the current date, it will have the same effectivity date as the cancelled original audit notice.

Furthermore, all investigations and proceedings under the authority of the old notice will continue to be valid and binding.

Issuance of the new notices will not mean a return to first base for the audit.

The deadlines for the submission of the report of investigation shall likewise be reckoned from the date of the original document.

Hence, the replacement will not open a window for further extension of the examination period. The replacement may take some time, although no timeline was set. Hence, taxpayers should just patiently wait until the transition is completed.

Business - Gov’t: Tax cheats’ days are numbered - INQUIRER.net

2010-09-04T01:18:00.000-07:00

Business - Gov’t: Tax cheats’ days are numbered - INQUIRER.net

BIR Isabela to intensify tax information campaign

2010-09-02T08:57:00.000-07:00

Source: www.pia.gov.ph

The Isabela Revenue District Office here is intensifying its tax information campaign to increase revenue collections to be used by the government in its operations.

BIR officials in this province are regularly using a tri-media approach to widened the agency's intensified tax information campaign encouraging the public especially business owners to pay the right taxes derived from their business income.

Isabela's Revenue Ditrict Office head Dr. Nerissa Agraam is urging the public to claim receipts whenever they are buying goods to business establishments or report business establishments that do not issue receipts to their office.

The new BIR provincial office is now located in Naguilian, Isabela along the national highway adjacent to the Naguilian Municipal Hall.

BIR officials are also scheduled conducting Tax Compliance Verification or Tax Mapping activity to all localities to ensure that all business establishments have complied with the basic requirements in doing business.

There will be announced Tax Compliance Verification to be conducted by BIR officials in the localities and there will also be surprise visits to business establishments and that would already be enforcing the agency's "Oplan Kandado".

BIR officials here are encouraging business establishment owners to be voluntary tax compliant to avoid business closure whenever found violating the country's internal revenue code. (PIA Isabela)

For DOF exec, banks’ excuse not acceptable

2010-08-30T00:00:00.000-07:00

Source: business.inquirer.net

Finance Secretary Cesar Purisima has found it unacceptable for banks to lend money even to those considered to be delinquent in their payment of taxes.

The banks explained that lending could fall drastically if they would be obliged to lend only to tax-compliant borrowers—an excuse Purisima seemed to find hard to swallow.

The Department of Finance earlier called on banks to help the government in its tax evasion drive. In particular, banks were asked to require borrowers to turn in the same financial statements they submitted to the Bureau of Internal Revenue prior to approval of their loans.

Purisima cited the rampant practice among corporate entities of maintaining two sets of books—one for the BIR and one for the bank they usually turn to for loans.

The financial statement submitted to the BIR is one that shows a lower income (to reduce tax liabilities), while the one that is shown to banks indicates a higher income (to avail itself of a higher amount of loan or to help ensure it gets the loan).

“Having two sets of books is illegal,” Purisima said.

If banks would require from their borrowers the same financial statements submitted to the BIR, he said, then tax evasion would be curbed and tax compliance would increase.

But some banks have expressed discomfort over the DOF plan, saying it may lead to a substantial drop in bank lending. They said the plan could even adversely affect the country’s growth prospects, where bank lending tended to support sustained expansion.

“That reasoning ... is not acceptable in a country that follows rules. I am appealing to the banks’ sense of responsibility and nationalism. Let us all be responsible members of society,” Purisima told reporters Friday night.

Purisima added the DOF would not think twice in filing a case against a bank that would tolerate the use of two sets of financial statements.

“Banks should not just do business for the sake of profit,” Purisima said. “They have to do the right thing.”

BIR Commissioner, Kim Henares: LOVE (of country) and TAXES

2010-08-28T16:04:00.000-07:00

Source: www.philstar.com

Kim Jacinto-Henares has assigned herself a daunting task.

She wants, with an infectious idealism pushing her, to correct 106 years of wrong practices in and wrong impressions of the Bureau of Internal Revenue (BIR), the government’s main revenue agency.

“You have to correct 106 years of wrong impression. If I’m able to do that in three months, then I would say I’m pretty successful,” Henares tells STARweek.

Henares is the new chief of the BIR, perceived as one of the most corrupt agencies of government. An accountant and a lawyer, the US-educated Henares acknowledges that her task is enormous and challenging.

“I’m very realistic. I know that before I see an uptick, we will see a downtick. It’s hard. It’s like rearing a child. You have to show people that you are serious,” she says in a soft but clear voice, her graciousness belying the steel that undergirds her convictions.

Henares knows how difficult it can be because she is not new to the BIR, having stayed in the revenue service from August 2003 to November 2005. During such period, she held the position of Deputy Commissioner of the Special Concerns Group and office-in-charge of the Large Taxpayers Service.

She finished her Bachelor of Science in Commerce major in Accounting degree at the De La Salle University and was admitted as a Certified Public Accountant (CPA) in 1981. She is also a lawyer, graduating Second Honor Medal from the Ateneo de Manila University.

Her education also includes a Master of Laws degree major in International and Comparative Law from Georgetown University in Washington DC.

Prior to the BIR, Henares worked as a tax lawyer at SGV & Co., was a partner at the Yap Jacinto Jacob Law Office, vice-president for corporate and legal affairs of ING Bank, governor of the Board of Investments and Senior Private Sector Development Specialist for the World Bank Group.

“Whenever I go into a job, the most important thing is that the objectives of my superior and mine are the same,” she explains.

This objective – the focus of all their actions for the next six years – is to collect the revenues that rightfully belong to the government so that it would be able to provide the required services to the people. Every peso, she says, would go to state coffers where it belongs.

“I’m also idealistic. My feeling is that I can contribute. If not for love of country, I wouldn’t be here,” she admits.

Henares is racing against time to put the proper systems in place, but she believes that six years is enough time to do it.

“The single biggest problem of the BIR is that we are so intelligent. If people feel they can get away with it, they do so. But there is also an upside to that. If they feel they can’t get away with it, they won’t. So it’s really convincing people that they cannot get away with it this time – and forever more,” she says.

As such, her general plans for the BIR are to implement existing tax laws strictly, to implement internal reforms and to put in place a new data and filing system for the entire BIR.

She is also giving erring taxpayers a sort of amnesty or a chance to settle their obligations before she brings the full force of her office on them.

“For those who have not filed the correct return, they can still file,” Henares says.

The agency is now drafting a resolution that would detail the terms of the program, which includes abating surcharges or penalties.

In terms of putting up a new system, Henares says she hopes to see this in place in the next two years.

“What I want is for the whole process to be an integrated system such as when the taxpayer gives us a tax return, it would be as close to an electronic data form as possible. As much as possible, data would be lodged by the taxpayers themselves in electronic data form so that we would not have to spend too much time and effort in converting it into electronic data form. So in that instance, we can easily match it,” she explains.

The BIR will also be working with other sectors for data sharing. These include the Bureau of Customs, the National Statistics Office and the various local government units.

There are limitations to the BIR’s access to information because of the Bank Secrecy Law, but Henares hopes that someday, in a better Philippines, the agency would also have enough access to personal records such as that of the Anti-Money Laundering Council.

All these plans notwithstanding, Henares believes the path of reforms is not easy, with the Philippines mired in patronage politics or the padrino system.

Not even two months into her new job, Henares says it is as hard as she imagined.

“I imagined it to be hard work. I put a lot of pressure on myself also so I want to put the reforms in place in a much shorter timetable,” she says, also admitting that she does not intend to “cling to this job,” maybe not even staying on for the whole six years of the Aquino administration if she can finish what she set out to do before 2016.

With her new job, Henares now has to wake up earlier than usual.

“I have to wake up a lot earlier because I have to be here (at the BIR head office in Quezon City) at 8 a.m. Sometimes, I have to be at a (television or radio) studio at 7 a.m.,” she shares.

Nevertheless, Henares, who celebrated her 50th birthday recently, tries to leave Sundays for hearth and home, with husband businessman Dan Henares. “I try as much as possible to leave Sundays free and to make sure that Sundays are devoted to family.”

She and her husband, a car and motorcycle enthusiast, enjoy driving around the country or going out of town.

“He likes cars so we drive around in a convertible,” she reveals.

Henares is such a low-profile person that not many people know that she is Chinese-Filipino, or that she likes to do stuff that, in her own words, are “not very feminine.”

“I like doing house work but of a different kind – carpentry, plumbing, painting. Before, when I was studying in the US, I was thinking of buying an old house and repairing it. It’s not feminine stuff but that’s me. People say Leos are very mechanical,” she says. In fact, she and her husband, whom she’s known for 25 years, like to tinker with cars and motorcycles.

What she still has to get used to is having bodyguards following her around, even to the grocery. President Aquino has assigned members of the Presidential Security Group to keep a tight watch on her.

Henares, nevertheless, does not mind this adjustment because she wants to be able to contribute to the country’s development.

“I believe that it’s a make or break time for the Philippines. It’s either we make it or we break it. We should take this opportunity and we should give it our 101 percent. All of us should help. That’s the reason I took the job.”

BIR optimistic on collection target

2010-08-28T05:28:00.000-07:00

Source: www.mb.com.ph

The Bureau of Internal Revenue (BIR) admitted on Friday that it cannot hit the P89-billion collection target for August, even as it moved the deadline in the filing of quarterly income tax from August 30 to 31.

But BIR Commissioner Kim S. Jacinto-Henares is optimistic in exceeding the actual collection for the same period last year of P67 billion, which was roughly 33 percent than the goal.

The BIR chief said the goal for the month was simply too high, adding that "nowhere in the BIR history that a monthly collection went up by 33 percent compared to the same period last year.’’

Records showed that for the first three weeks of the month, the take reached some P43 billion, or roughly 24 percent of the goal.

Henares said the collection will be pushed upward when the quarterly income and withholding taxes come in. (Jun Ramirez)

Enrile bill to give BIR sole hand in prosecution of tax cases

2010-08-28T05:18:00.000-07:00

Source: www.malaya.com.ph

TO effectively prosecute tax evasion cases, Senate President Juan Ponce Enrile has filed a bill giving Bureau of Internal Revenue legal officers the "exclusive authority" to investigate, prosecute and handle tax-related cases in the court.

In Senate Bill No. 133, Enrile said "the efforts of the BIR to collect taxes by effectively prosecuting various tax-related cases have remained hampered (by) the bureaucratic processes currently existing in our justice system." Such failure, he said, has been one of the causes of chronic revenue deficits of government.

Enrile pointed out that under the provisions of Republic Act No. 8424 (the Tax Reform Actof 1997), civil and criminal actions and proceedings instituted in behalf of the government shall be conducted by the legal officers of the BIR.

"However, due to the limited manpower of the BIR, it has become their practice to refer to the Department of Justice various cases relating to collection assessment for the determination of probable cause prior to the filing of appropriate cases," Enrile, a noted tax lawyer, said. "Contrary to the intent of the law, this present system has reportedly become a breeding ground for corruption as some taxpayers manipulate the system by conniving with the prosecutors of the DOJ to delay resolution of their cases or, in some instances, resolve the cases in their favor."

Enrile’s bill will also vest in the Department of Finance the authority to review every criminal complaint before proper cases are filed in court.

‘When enacted into law, these amendments will allow the BIR to expand their legal department to provide the necessary assistance in processing these cases. The practice of referring these cases to the DOJ, therefore, will be eliminated and the probability of collusion between the prosecutors of the DOJ and taxpayers will be removed."

Enrile said that greater efficiency in the collection of taxes by the BIR would result in improved internal revenue collections and reduce the chronic budgetary deficits in the government.

2 business establishment iti region 2, ingkandado ti BIR

2010-08-21T22:32:00.000-07:00

Source: www.bomboradyo.com

Iningetan ti Bureau of Internal Revenue (BIR) iti region 2 ti kampanya maibusor kadagiti business establishment nga saan nga agit-ited iti resibo ken saan nga agbaybayad iti umno nga buwis.

Nagsaruno nga ingkandado ita ti BIR iti panangidaulo ni Regional Director Thelma Milabao ti dua nga negosyo nga naglabsing iti linteg.

Itay bigat ket immuna nga impaserra ti grupo ni Milabao ti maysa a dakkel nga hardware ken merchandise sadiay Gundaway, Cabarroguis, Quirino.

Iti pannakiinnuman ti Bombo Radyo Cauayan, kinuna ni Regional Director Milabao nga natakuatanda ti panaglabsing ti naikandado nga business establishment iti insayangkatda nga surveillance tapnu maammuanda ti pudno nga kitana.

Inlawlawagna nga ti Oplan Kandado ti BIR iti intero a pagilian ket nangrugi idi 2009 tapnu madusa dagiti negosyante nga saan nga agit-ited iti resibo ken saan nga agbaybayad iti umno nga buwis.

Naisaruno nga ingkandado ti BIR iti panangidaulo ni Revenue District Officer Nerissa Agraam ti Ecstacy Hotel sa Tagaran, Cauayan City nga kukua ti maysa nga dakkel a negosyante iti Cauayan City.

A taxing problem

2010-08-21T22:02:00.000-07:00

By Cielito Habito
Philippine Daily Inquirer

MOST ECONOMISTS agree that the single most critical economic imperative for the Aquino government now is to dramatically hike government revenues. The previous government left behind a P197-billion deficit in the first half of the year, much more than the P153 billion incurred in the same period last year. This is already more than three-fourths of the P250-billion deficit originally targeted for the entire year. As a proportion of gross domestic product (GDP), our government’s budget shortfall has gone up from less than one percent in 2007 and 2008, to 3.9 percent in 2009, and on to 6.9 percent in 2010 so far. This is well over twice what is usually considered to be the safe level of 3 percent, suggesting that the Arroyo administration threw all caution to the winds in managing its finances in its closing months.

What is wrong with having a huge government deficit anyway? Government needs to borrow massively to finance it, and anyone instinctively knows what is wrong when you spend and borrow way beyond your means, especially in the context of individual or family finances. But when it comes to borrowings and debt, there is one crucial difference between a person or family, and the government. Sooner or later, an individual’s debts would catch up with him, and he would have to pay up. Governments, on the other hand, can live on indefinitely, and simply keep incurring new debt to pay up old maturing ones. In other words, government can theoretically keep rolling over its debts forever, and the day of reckoning need never come. Why, then, should we worry about large government deficits?

In the short term, having large deficits means that government would suck up a large chunk of the loanable funds in the system, funds that could otherwise be available for the private sector to fund investments. By incurring a large deficit, government “crowds out” private borrowing, thus reducing potentially job-creating private investments. But it hurts even those private investors who manage to obtain loans, as the cost of borrowed funds (i.e., interest rates) would have been jacked up by the large demand created by the government. Either way, government makes it difficult for the economy to generate the jobs needed to bring poverty levels down.

In the medium to long term, accumulating large debts forces the government to spend more and more every year for servicing the debt, that is, for interest payments and amortization of the loan principal. As of 2006, the Philippine government was spending a third of its annual budget on debt interest payments alone, thereby crowding out vital expenditures on social services and infrastructure. The budget shares of education and health had in fact kept falling from 17.1 and 2.1 percent in 2000, respectively, to only 13.9 and 1.3 percent in 2006. Through that period, debt interest payments had jumped from one-fifth to one-third of the annual budget. The Aquino government now faces the same prospect of a mounting debt service burden that could severely tie its hands in providing for our ever-growing needs for education and health services. This is not to mention infrastructure, wherein we are badly lagging behind both our neighbors and our own requirements.

So what is P-Noy and his economic managers to do to achieve the required massive boost in revenues? Simply raising taxes when an estimated P250 billion is lost yearly to tax evasion would be patently unjust as it puts the burden solely on the shoulders of obedient taxpayers. We would, in effect, be penalizing those who actually ought to be rewarded. Thus, government must first exhaust all efforts to raise tax compliance and curb corruption in the revenue agencies. This will take systemic changes in the structures, processes and procedures in revenue collection, not just sporadic tax campaigns and tax amnesties that ultimately abet continued evasion. A move worth reviving is corporatization of the revenue agencies to be able to effect long-needed changes in the incentive and penalty systems for revenue officials and officers. Another key imperative is beefing up the human resource support for processing the large volumes of third-party computer data now accessible to the Bureau of Internal Revenue (BIR) towards tax fraud detection. The US government recently approved $54 million for the computerization program of the Bureau of Internal Revenue under the Millennium Challenge Account Compact Agreement. This could go a long way toward optimizing the use of information technology in boosting tax collection efficiency.

But there are certain good tax measures on the table that the 15th Congress should consider as well. One is the restructuring and indexation of the excise taxes on “sin products” (tobacco products and alcoholic beverages), estimated to yield up to P51 billion. It is a good measure because our current tax rates on these products have been determined by the World Health Organization to be comparatively low, and it is well-known that the industry got away with a watered-down excise tax law the last time around. Similarly, additional excise taxes on petroleum products could raise up to P25 billion, while being justifiable as a corrective tax to mitigate pollution and congestion costs associated with petroleum consumption. Still another is the rationalization of fiscal incentives to remove redundant ones that only serve to erode government revenues without helping attract new investments.

In 1997, tax revenues hit 17 percent of GDP; the Arroyo government left it at barely over 12 percent. I see no reason why we cannot get it right back up to 17 percent and beyond in the foreseeable future.

Taxman goes after bet who spent P200

2010-08-21T21:56:00.000-07:00

Source: newsinfo.inquirer.net

It could only happen in the Philippines.

The Bureau of Internal Revenue (BIR) wants to collect P212.67 from a mayoral candidate here, who spent P200 in the May elections.

“I have two options—wait for the BIR to sue me or simply pay them,” said Peter Puzon, one of nine mayoralty candidates here.

“But as a concerned poor citizen, I’d better pay up because the [BIR] might not be able to collect millions of pesos in withholding tax from other candidates who underreported their campaign expenses,” he said.

Puzon was supposed to pay only P10 which is equivalent to a 5-percent withholding tax on his campaign expenses of P200.

However, he failed to pay the tax before the June 10 deadline.

He claimed that he went to the BIR office here two weeks before the deadline to pay P10 but the personnel there did not seem to give importance to his expense report.

Letter from the BIR

Puzon did not bother to follow up his tax liability until he received registered mail from the BIR.

In a letter signed by OIC-revenue district officer Fely Simon, the BIR said it was collecting P10 tax, P2.50 surcharge, 17 centavos interest and P202.67 “legal increment compromise” or a grand total of P212.67 in withholding tax liability.

Puzon, who spent P200 in the last elections, garnered 66 votes or a P3 investment per voter.

“The number of votes I got wasn’t bad. If I had spent as much as the other candidates, I might have won,” he said.

A winner in other ways

Although he lost, the 53-year-old bachelor said he still felt he was a winner. He cited the many public forums where he was able to articulate his positions on various issues and concerns such as the city’s garbage woes, the lack of development planning and other urban problems.

For his election campaign, Puzon said he spent P100 on two rubber stamp pads which he bought from a sidewalk vendor. Inscribed on one stamp pad was the phrase, “Peter Puzon for Mayor: The anti-corruption vote,” while the other pad had the words, “The Protest Vote.”

He said he spent another P100 photocopying a newspaper clipping detailing his position against alleged corrupt practices and other issues. At 60 centavos a copy, he reproduced 166 copies and distributed them during the campaign.

BIR looks at benchmarking assessments

2010-08-21T21:28:00.000-07:00

Source: www.mb.com.ph

The Bureau of Internal Revenue (BIR) is studying a new strategy in investigating the financial statements of various business enterprises, it was learned on Monday.

Called benchmarking, it is an efficient system in determining the income and value-added tax (VAT) liabilities of enterprises belonging to the same line of business, according to its proponent Assistant Commissioner Nestor S. Valeroso of the Large Taxpayers Service (LTS).

Valeroso said he has already submitted the proposed audit program to Revenue Commissioner Kim S. Jacinto Henares for review and approval.

“At this point in time there is no need to legislate new tax laws, but rather efficiency in the tax collection through benchmarking," he said.

The innovative audit scheme is similar to the collection of capital gains tax (CGT) on the sale of real estate properties wherein the tax is based on the zonal or fair market value of the place where the said property is located, said Valeroso.

Under the scheme, investigation will be conducted on industry by industry basis, say restaurant or hardware, comparing their purchases and sales.

‘Too many of them cheating’ — BIR

2010-08-07T17:21:00.000-07:00

Source: www.mb.com.ph

Commissioner Kim S. Jacinto-Henares of the Bureau of Internal Revenue (BIR) said on Tuesday they will not run out of criminal cases to be filed in court against tax evaders because “there are too many of them cheating.”

BIR chief made the comment as her tax collectors pledged to President Aquino and to the new BIR management to do their utmost in catching individuals and corporations manipulating their financial statements to cut down on their tax payments.

The taxmen expressed their full support when the President attended the BIR’s 106 founding anniversary last Monday asking them to redouble their tax collection drive to raise funds for his various social and economic programs, particularly the universal health care and education.

The President assured the men and women of the service for financial support and rewards if they do their job well conducting a relentless campaign against tax cheats, among others. (Jun Ramirez)

BIR fumbles on Villarica

2010-08-07T17:20:00.000-07:00

Source: www.manilastandardtoday.com

HENRY Villarica of the 400-strong Villarica Pawnshop chain took out ads in the Saturday papers to distance his empire from the tax troubles of brother William, a sports car fancier.

“William Villarica does not own any Villarica Pawnshop,” said the ad. “He is in no way an employer, stockholder or officer of any of the corporations that own and operate Villarica Pawnshop.”

“It is likewise unfair that unverified reports have been sensationalized and our corporate name has been dragged into the confusion,” the ad harrumphed, without identifying that it was the Bureau of Internal Revenue that was the source of the news release.

According to the industry grapevine, William sold out in the late 80s his shareholdings in the family pawnshop, which was started by their mother, to brother Henry, a UP law graduate and a Bar topnotcher.

A man-about-town, William then gave away the remaining branches in his control, now called Dominion, to his wife as part of a divorce settlement.

What is not generally known to the public is that Henry’s wife and college sweetheart and pawnshop partner, Linabelle Ruth, has just been elected a first-time representative of the fourth district of Bulacan.

Even better, Villarica is a card-carrying member of the Liberal Party.

Could that be the reason why P-Noy did not identify by name the erring pawnshop when he appeared before Congress during his first State-of-the-Nation Address?

Just asking.

Aquino seeks higher tax take

2010-08-07T17:16:00.000-07:00

Source: newsinfo.inquirer.net

MANILA, Philippines—President Aquino hopes to outdo his predecessor in terms of tax collection by increasing the tax-effort ratio from the current 13 percent to 15 percent by the end of his term.

But Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) said her agency will try to achieve the target—not in six—but within the next two years.

In a speech during the 106th anniversary of the BIR in Quezon City, Aquino reminded the agency that it achieved a 17-percent tax-effort ratio during the administration of President Fidel Ramos.

“If you were able to do it then, you can do it again now,” he said in Filipino. “Let’s help one another to increase the present 13 percent to 15 percent before the end of my administration.”

To underscore the importance of the BIR’s role in delivering on his campaign promise, the President pointed out that he showed up at the affair on a few days’ notice.

Mr. Aquino has given the bureau a fresh target of P860 billion in tax collections this year, from the previous goal of P830 billion.

“We will strengthen our revenue centers and because the BIR is one of the most important sources of revenue, we will intensify what you have started during the first few weeks of our administration—identifying and filing charges against individuals and organizations that are not paying taxes,” he said.

To encourage better tax collection, Mr. Aquino promised to provide swift rewards to informants whose tips lead to the recovery of lost revenues.

In one agency, for instance, the President noted that the reward was pegged at 20 percent of the recovered revenue, while smugglers offered only 10 percent to those who would allow them to evade taxes.

Still, he said, some tax officers preferred the 10-percent because the 20-percent incentive was made available only upon retirement. “The other one, you received right away (kaliwaan),” he said.

Taxmen sue Corinthian couple, lose case against actor

2010-08-07T17:14:00.000-07:00

Source: www.manilastandardtoday.com

The Bureau of Internal Revenue on Thursday won some but lost some in its fight against tax evasion.

The revenue agency filed a criminal complaint against the executives of a construction firm for failing to pay close to P68 million in taxes, but it suffered a setback after the Quezon City Metropolitan Trial Court Branch 33 dumped its tax evasion case against actor John Lloyd Cruz for lack of probable cause.

Internal Revenue accused of tax evasion Dennis Masigan, president of DSM Construction and Development Corp., his wife Natalie Ng Masigan, the company’s corporate secretary, and Eldrin Masigan, vice president for operations. The Masigans live in Corinthian Gardens, Quezon City.

The agency said the three failed to supply accurate information on their 2006 income tax return and failed to pay P67.6 million—P52.5 million in income taxes and P16.1 million in value-added tax deficiencies.

Earlier, the agency filed tax evasion charges against pawnshop magnate William Villarica, who paid only P25,600 in income taxes from 1998 to 2009 despite having purchased a P26 million Lamborghini sports car.

But the agency’s case against Cruz hit a wall after the Quezon City court said it failed to properly serve its subpoena to the actor.

“The service of the subpoena is fatally defective and that complainant BIR failed, deliberately or negligently, to comply with its own rules,” Quezon City Judge Alfredo Ampuan said.

Cruz had claimed the summons sent to him did not indicate a notice of hearing.

To further tighten the screws on tax evaders, the government has said it will run after lawyers, accountants and bankers who may be helping companies and individuals evade taxes.

“In our future cases, we will be filing cases against accountants and even lawyers if called for,” Finance Secretary Cesar Purisima said in a press briefing Thursday.

Bankers may also be held liable in tax evasion cases if the lender accepted “illegal documents” from a borrower who’s the subject of tax complaint, Purisima said earlier.

“We will leave no stone unturned in our fight against tax evasion,” Purisima said, adding tax returns would be cross-checked against lifestyles.

The business community welcomed the crackdown. “It’s a challenge to get tax evaders,” said Marcelo Ayes, senior vice president and head of treasury at Rizal Commercial Banking Corp.

“But if they’re able to get those guys, if they’re consistent in filing cases regularly and are able to put them in jail, taxpayers will learn to pay right,” Ayes said. Bloomberg

Don’t accept gifts, tax collectors told

2010-08-07T17:12:00.000-07:00

Source: www.mb.com.ph

Tax collectors of the Bureau of Internal Revenue (BIR) were advised on Friday not to accept gifts and invitations for coffee, or lunch dates from taxpayers to cut down the incidence of corruption in the service.

The Association Chief Revenue Officers of the Philippines (Acrophil) came out with the policy guideline in answer to President Nonoy Aquino"s moral crusade of "Kung Walang Corrupt, ay Walang Mahirap."

BIR insiders said the request is feasible and doable if taxmen subscribe to the call of the President for unity, walking on the road of righteousness for the good of the Filipino people.

The two-page memo also requested revenue fieldmen to release in one-hour time ordinary documents sought by taxpayers including registration, verification of tax payments and Tax Identification Number. (Jun Ramirez)

BIR: Another big fish to fall

2010-07-20T03:31:00.000-07:00

Source: newsinfo.inquirer.net

The chief of the Bureau of Internal Revenue Monday told reporters that the agency would file another tax evasion case against a prominent person this week, in line with the Aquino administration’s promise to catch tax cheats weekly.

Revenue Commissioner Kim Henares declined to elaborate, but warned tax cheats to settle their liabilities before formal charges were filed against them.

“Don’t wait for us to file a case against you. Please pay already your correct taxes because once we file a case, there will be no compromise. It will proceed.”

Asked by reporters how “big” the next respondent would be, Henares said: “We do not file small cases. It will be a major case. We cannot tell you who is on the radar because it will be unfair to the people involved.”

Last week, the government filed tax evasion charges against pawnshop owner William Villarica, who allegedly paid only P25,607 in taxes from 1998 to 2009.

With the revenue target for the year revised to P860 billion, Henares said, the BIR now needed to collect P62 billion monthly.

The BIR collected P59.37 billion in June, P3.3 billion less than its target, the agency said Monday.

The government has raised the BIR collection target by P30 billion to P860.4 billion this year after it widened its 2010 budget deficit forecast to P325 billion, or 3.9 percent of the gross domestic product.

Valenzuela Rep. Magtanggol Gunigundo said Monday that one way to help wipe out the deficit was to stop giving unnecessary tax incentives to investors, and to just focus on creating a consistent and stable business environment in order to boost the country’s economy.

Gunigundo, who used to head the House committee on labor and employment, pushed for the rationalization of tax breaks that the government granted to foreign corporations to entice them to come to the Philippines.

BIR misses first half revenue goal, vows to catch up

2010-07-20T03:27:00.000-07:00

Source: www.bworldonline.com

THE BUREAU of Internal Revenue (BIR) has missed its first half collection goal, putting more pressure on the government’s bid to rein in the budget deficit.

The BIR, which accounts for about two-thirds of total tax revenues, said January to June collections amounted to P403.469 billion, short of a preliminary P420.996-billion goal for the period.

Internal Revenue Commissioner Kim S. Jacinto-Henares said the first half target still had to be approved by the interagency Development Budget Coordination Committee (DBCC).

"My understanding is we have to submit to the DBCC the adjustments in the monthly collection goals since they raised our full-year goal to P860.4 billion," she said in a telephone interview.

The DBCC has raised the BIR’s full-year goal from P830.4 billion on expectations of increased economic activity this year. The previous first half collection target was P390.266 billion. The DBCC also widened its 2010 budget deficit forecast to P325 billion, or 3.9% of GDP.

For June alone, the BIR’s collections totalled P59.366 billion, below a P62.668-billion target.

Speaking to Malacañang reporters, Ms. Jacinto-Henares said BIR personnel would have to work hard not only to meet the monthly collection goals but also to make up for the shortfall.

The wider 2010 shortfall, resulting from weak tax collections and higher-than-expected spending early in the year due to government pump priming, would be funded through domestic borrowing and asset sales, finance officials have said.

But proceeds from asset sales this year were now expected to reach just P2 billion, sharply lower from an original target of P30 billion. The new government wants to push through with the scheduled sale of three major state assets this year but there is no guarantee the deals would be completed before year-end.

The deficit stood at P162.1 billion as of end-May, breaching the previous administration’s first half cap of P145.2 billion. -- reports from Reuters, LDD and AMGR

Aquino visits wake of soldiers ambushed in Mountain Province

2010-07-16T19:47:00.000-07:00

Source: /newsinfo.inquirer.net

President Benigno Aquino III on Thursday visited three wakes held for soldiers, who were killed last week by communist rebels while on their way to a military-sponsored medical-dental mission in Bontoc, Mountain Province.

Seven soldiers on July 9 fell to a rebel operation conducted allegedly by the Kilusang Larangang Gerilya-Marko of the New People's Army at Barangay Samoki, which is near the Bontoc business center, according to military reports.

Aquino first visited the wake of Corporal Anthony Bunagan in Barangay (village) Cataggaman Nuevo in Tuguegarao City before motoring to Ilagan town in Isabela to visit the wakes of Private First Class Camilo Topinio in Barangay Manaring and Sergeant Melchor Castro in Barangay Marana First.

Speaking to reporters in Barangay Marana First, Aquino said the ambush compelled the Armed Forces of the Philippines to review its protocols and operational systems to prevent more deaths, and to ensure the speedy benefits for the families of soldiers slain in the line of duty.

"We need to review the system and procedures at the [Armed Forces]. We need to ensure that there will be no more people to be hurt," he said.

"Hindi maiwasan na minsan may masaktan. Kaya lang manigurado tayong maaasikaso naman ang mga pamilya nila … [ang] tulong sa kanila. Hindi na natin maibabalik [ang buhay], kaya lang isipin natin ang malasakit sa bansa na ginawa nila [We cannot avoid losing lives in the military service. But we can ensure that their families are protected and taken care of. We cannot bring the soldiers back but we have to take note of the sacrifices for the country]," he said.

He said the government was giving P250,000 for each slain soldier, aside from a P180,000-fund representing housing assistance and other benefits.

The others killed were Lieutenant Lito Punio of Zamboanga City; Cpl. Cornelio Balmes of Umingan, Pangasinan; Private First Class Wendell Gazzingan of Rizal, Kalinga; and Private First Class James Tio-an of Tabuk, Kalinga. They belonged to the Army's 52nd Reconnaissance Company.

BIR probe on deficiency taxes continues

2010-07-16T19:27:00.000-07:00

Source: www.mb.com.ph

The Bureau of Internal Revenue (BIR) announced on Friday it is not stopping its investigation and collection of deficiency taxes from individual and corporate taxpayers with existing tax debts.

BIR Commissioner Kim Jacinto-Henares issued the clarification following complaints by many taxpayers throughout the country that some district offices have temporarily stopped issuing payment order (BIR Form 0605).

"I have not issued any order stopping audit work, or collecting deficiency tax payments," Ms. Henares said.

She said that what she told tax collectors was to follow existing audit guidelines like the issuance of preliminary investigation report to taxpayers, conference with taxpayers concerned, submission by taxpayers of requirements, preparation of agreement form and issuance of payment order.

A Metro Manila revenue district officer who refused to be named confirmed that some of his colleagues were deliberately delaying the issuance of BIR Form 0605 awaiting further instructions from the new BIR commissioner. (Jun Ramirez)

What went before: RATE program

2010-07-16T19:23:00.000-07:00

Source: newsinfo.inquirer.net

The Department of Finance (DoF) and Bureau of Internal Revenue (BIR) launched the program Run After Tax Evaders (RATE) in March 2005 to deter tax evasion, enhance tax compliance and promote public confidence in the tax system.

Then Finance Secretary Cesar Purisima and former BIR Commissioner Guillermo Parayno Jr. teamed up for the program, which directed authorities to file tax evasion charges every week against high-profile individuals or businesses.

In its first three months, the program drew praises from the government and the public as the BIR filed at least two tax evasion cases every week and tax collections shot up.

In July 2005, however, Purisima and Parayno resigned from their posts and joined the “Hyatt 10,” a group of Cabinet officials and advisers that called for then President Gloria Macapagal-Arroyo to step down in the face of election fraud allegations.

The change of leadership at the DoF—under Margarito Teves—and BIR—under Deputy Commissioner Jose Mario Buñag as the agency’s interim head—took a toll on the program.

Although Teves vowed to continue the campaign against tax cheats, he said the DoF would veer away from the weekly filing of criminal cases against tax evaders to ensure the quality of the cases.

On the other hand, Buñag was more inclined to enter into compromise agreements with tax evasion suspects.

In 2005, the BIR failed to meet its collection target by P15 billion, collecting only P532 billion compared with its goal of P547 billion.

In 2006, under its RATE program, the BIR won 36 of its 48 tax cases and refund cases, resulting in P7.9 billion in collections and savings.

In 2007, the program won 65 of its 76 tax cases, collecting P8.7 billion.

In 2009, the BIR fell short of its monthly target, resulting in a shortfall of P53 billion for the entire year. It, however, filed four new cases in the Department of Justice, in addition to the 26 cases it previously filed. Lawrence de Guzman, Inquirer Research
Sources: Inquirer Archives

Gov’t: No compromise with tax evaders

2010-07-10T07:41:00.000-07:00

Source: www.mb.com.ph

Finance Secretary Cesar V. Purisima assured that the Aquino government will not agree to a compromise with tax evaders and smugglers as the new administration plans to raise revenues without burdening Filipinos with new taxes.

Purisima, whose term as finance chief started last week, said the Bureau of Internal Revenue (BIR) and Bureau of Customs have pledged to file complaints against identified tax-evaders and smugglers to the public prosecutor on a weekly basis.

“There will be no compromise and it is not business as usual. Conviction is a tool to change behavior and to make sure a clear signal is sent. The only way to change the behavior of people is to prosecute,” Purisima told reporters.

Aside from tax evaders and smugglers, Purisima said the government will also file reports against some corrupt state revenue collectors and will review all cases and complaints that were previously filed.

Bureau of Customs Commissioner Angelito Alvarez, said the bureau will name two big-time smugglers every two weeks and file cases against them as part of the effort to meet the agency's revenue target of P280 billion.

Alvarez, however, admitted that despite his 20 years experience dealing with the Customs, he would still need more time to start the campaign against smugglers as he is still new in the job.

Internal Revenue Commissioner Kim S. Jacinto-Henares, meanwhile, said the main-tax agency also plans to file a case against tax cheats twice a month.

“What we plan is to revive the [run after tax evaders] RATE program. Our target is to file a case every two weeks or twice a month,” Henares said.

A brainchild of Purisima during his first stint as finance chief in 2005, the RATE is a campaign against delinquent taxpayers including celebrities and big businessmen.