BIR exec fears reduced collection this year

By Mortz C. Ortigoza

QUEZON CITY – A top executive of the Bureau of Internal Revenue worries that the hundreds of billion pesos per year to be collected by the regional offices of the tax agency are prejudiced because of the cap on the income taxes and those of the contractors’ taxes.

“Yes, not only sa income tax but also we have a problem on the collection of the withholding tax on DPWH. Kinuha na ng national office ng Large Taxpayers Service (LTS). This year they listed LTS from the regional office lahat ng withholding taxes, from all contractors all over the Philippines, doon na ma reremit sa national,” cited by former Region 1 BIR Director Marina de Guzman.

BIR Regional Director Marina de Guzman. She supervises nine
revenue district offices in Quezon City, other cities, and Rizal 
Province. Her office, second biggestregional office in the country, 
has a tax target of more than P171  billion this year.

She is now the Regional Director that covers this city, other cities, and Rizal Province – the second biggest tax region in the country after Makati City.

The same dilemma was shared by two top executives of the BIR in Region 1.

De Guzman said that on the contractor’s tax alone, billions of pesos will be lost by these offices.

Aside from the cap of P250, 000 a year that the tax agency could no longer tax on the taxpayer and the deprivation of contractor taxes of those builders of government infrastructures under the watch of the Department of Public Works & Highway, she deplored that the proceed of the taxes from the Train Law will also go to the national government and not to the regional offices.

Train Law or the Tax Reform for Acceleration and Inclusion imposes higher taxes on cars, fuel, tobacco, cosmetic surgery, tobacco, and some sweetened beverages.

 De Guzman said these new sources of taxes will not help spike their collection as those monies go to the national government.

She cited that the tax goal of her office this year will be more than P171 billion.

“Yes, bilyon din ang nawala sa amin. I don’t want to give an exact amount. As of now kasi iyong region namin we have nine district offices they are still collecting from the DPWH within Quezon City”.

She said that the P250, 000 exemptions given by the administration of President Rodrigo Duterte to taxpayer who received this amount annually will affect them tremendously.

“Malaki, we have collected about three billion pesos last year from those receiving P250, 000 and below, the withholding tax, the income taxes about P2 billion,” she cited her experiences on her office.

Train Law cited that income taxpayers with an annual salary of P250,000, or those earning approximately P22,000 monthly and below, are now exempt from income tax payment.

The law also exempts the first P90, 000 of the 13th month pay and other bonuses.

Meanwhile, some Revenue District Office (RDO) chiefs in Pangasinan lamented that the central government still included in their tax target this year the taxes of those contractors that the national office will be getting from these RDOs.

RDO -4 that covers Central Pangasinan has a tax goal this year of P4, 772, 404,000.00 compared to its last year’s target of P4, 015, 661,029.41.

That collection in 2017 and repeated as target for 2018, although hundreds of million pesos bigger still include the DPWH taxes, a source at the RDO-4 cited.

“It’s tough for our RDO-Chief since we are no longer allowed to collect the DPWH taxes but they are included in this year’s collection,” she said.

Another source at the RDO-6 that is based in Eastern Pangasinan said that despite its almost P2.3 billion tax goal this year reduced by P200 million because of the public works’ taxes, the office still faces a tall order because the reduction was to the almost P300 million that had been added to the P2 billion.

“Although the P300 million became P100 million of our present roughly P2.1 billion goal, we still have to collect a significant part of the DPWH taxes inside the P2 billion for this year,” the source sadly said.