BIR Pangasinan favors taxes on pension and insurance

Revenue District -5 chief Quirino Ramos

Ramos said that the main source of his tax collection in RDO-5 is the typical taxpayers as his district covers towns that are not as progressive as those in Central Pangasinan.
By Mortz C. Ortigoza
Two top honchos of the Bureau of Internal Revenue in Pangasinan came to the succor of Commissioner Kim Henares after she issued a circular that met hostile resistance from lawmakers.
Henares issued Revenue Memorandum Circular 53-2011 which said taxpayers who go beyond the mandatory contributions on the state pensions, health and insurance institutions should pay taxes.
Revenue District Officers Quirino Ramos and lawyer Beverly Milo vouch to the soundness of RMC 53-2011that covers the country’s workers contributions on Social Security Services, Government Service Insurance System, Pag-Ibig, or PhilHealth.
“I agree with it!” quipped by Ramos who is the chief of RDO-5 who oversees most of the towns and a city in Western Pangasinan.
Milo, who is the head of RDO-6 which covers most of Eastern Pangasinan, said the circular provided that what is taxable is the basic contribution.

Cagayan de Oro City Rep. Rufus Rodriguez filed recently House Resolution 1973 directing the committee to conduct an inquiry, in aid of legislation, into RMC 53-2011 which would make contributions to pension, housing and health funds amounting to more than that required by law subject to income and withholding tax.
Milo, whose office is in Urdaneta City said RMC-53-2011 has been implemented on July 1, 2011, the day the circular was released.
She explained that the BIR tax an employee by the following illustration: Worker A receives P15 thousand a month pay. He pays P300 for pension, health, or social institution (together with P300 counter-part from his employee). The P600 is the basic exemption for taxation
If A adds another P300 (plus another P300 additional counterpart from his employer) contribution for him to get a higher premium in the future, Milo said the second tranche of the contribution is already taxable.
Meanwhile, Ramos said that once in while he is seen with taxpayers and bookkeepers in his office in Alaminos City because he appealed to them to pay more taxes to the government.
He said that his district’s collection was affected tremendously by the absence of Tax Remittance Advisory (TRA) because of the absence of massive government projects in the first semester of last year.
TRA is when private subcontractors’ income tax and Value Added Tax are withheld by the government that contracted their service for a certain project.
The Aquino Administration has just implemented the bulk of the P72.11 Billion Disbursement Acceleration Plan as stimulus package in November last year that caused a lackluster economic growth in the country for that year.

BIR did not benefit on massive government projects last year

URDANETA City – Could the late implementation of the P72 billion government stimulus economic packages bode well for sluggish tax collections of the tax offices in Region 1?

The top honcho of the Bureau of Internal Revenue, who oversees eastern Pangasinan, thinks otherwise.

Atty. Beverly Milo said the impact of the package could not be felt by the tax offices in the region in the last semester of 2011 because it would be hampered by the requirements of the bidding process for the private contractors.

“You need to post it, computer (it), and advertise or bid it. There will be an open bidding for everybody who will qualify will be submitting (documents) like Philgephs, and other means of advertisement for newspaper of general circulation and so on,” she stressed.

She said that if the projects were awarded in December 2011, BIR will be collecting the taxes on March 2012 from the contractors.

“Mga short projects iyon, depende sa period ng accomplishments,” Atty. Milo stressed.

The BIR is getting these kinds of taxes from the private sector through the Tax Remittance Advisory and the projects awarded to the local government units.

 TRA is where the various government offices nationally and locally deduct the income tax and the Value Added Tax of the private contractors who construct government funded projects and remit them to the BIR.

Atty. Milo said that the stimulus packages could have a multiplier effects to the economy as businessmen hires new employees to supply the need of new government projects.

Meanwhile, partial records availed by this paper from the regional office of the BIR in Region-1 state that with a tax goal of P6,526,186,000.00 tasked by the national government to BIR Region-1, it collected only P6,224,968,760.17 or a deficiency of more than P301 million.

BIR insiders blame the lack of massive government projects the Aquino Administration failed to implement in the First Semester of last year ( Mortz C. Ortigoza).