Higher VAT helps people conserve energy - BIR top honcho

TWO TAX LEGAL LUMINARIES: Assistant Regional Director Atty. Ernie de Vota of the Bureau of Internal Revenue in Region-1 (Right) answers questions from the media in a press conference. At right is Atty. Beverly Milo – the new boss of the Revenue District-6 that oversees Eastern Pangasinan.

CALASIAO-The 12% Value Added Tax on fuel gives a windfall of up an estimated P70 billion for the Bureau of Internal Revenue that is deprived of new tax measures this year.

The more the fuel pump prices increase, the more VAT government collects.

But the Assistant Regional Director of the BIR based in Region-1 sees the spikes on gasoline and diesel in a different way.

Atty. Ernesto de Vota said that if a person wants a reduction of the VAT he does not help conserve energy.

He posed when would the government gets it revenue with a reduced tax on fuel:

“You are not helping the public because you will be encouraging them to spend or use more gasoline. You do not promote conservation of energy. Kasi mura na, so gagamit na sila ng gagamit. Aside from that when the government would get its VAT (collection) loses as a result of the reduction of the VAT. So hindi pa kaya ng gobierno mawawala ang VAT sa gasoline simply because kulang pa ang pera natin,” he stressed.

De Vota has commented on the stand of Finance Secretary Cesar V. Purisima that the implementation of the Annual Information Return does not violate the Secrecy of Bank Deposits Act.

AIR is Revenue Regulations No. 2-2011 which required the following:

An individual with respect to pure compensation income, derived from sources within the Philippines, the income tax on which has been withheld under the Tax Code, whose annual taxable income exceeds P500,000; Individuals, estates and trusts whose sole income has been subjected to final withholding tax with aggregate final tax withheld exceeding P125,000; and; Individuals whose sole income is exempt from income tax and whose total annual income (exempt) exceeds P500,000.

The AIR shall contain information on the taxpayer’s income which has been derived from sources other than salaries or active participation in business, and the corresponding final withholding tax (or final tax) levied on such income.

Atty. de Vota does not find how AIR violates if this law asks the tax payer how much he deposited in a bank.

He said money in the bank is part of the assets and liabilities so it has to be declared.

“Well, as far as I am concern there is a provision of the Constitution and under the Tax Code. Such power is to obtain information to require documents of every taxpayer to support of their tax return. In other words it is part of our mandate. We have that power; we have even that subpoena power. So we can request the taxpayer to provide additional information that will guide us in determining their actual income,” he said.

He declared that there is no violation of the secrecy law on bank as enunciated in the past by Rep. Rufus Rodriguez (2nd District, Cagayan de Oro).

“Even in America, they can inquire into your bank. You see I think there is no violation of the Constitution regarding the issue”(Mortz C. Ortigoza).