BIR seeks tax goal review due to storm deductions
12/17/2009 | 09:23 AM
The country's tax chief on Wednesday called for a review of next year’s collection target, citing forgone revenues of around P6 billion alone from taxpayers claiming typhoon-related deductions.
"The casualty loss [incurred by taxpayers] is P21 billion. If converted into tax payment, that would be around P6 billion. That would represent the income tax deduction," BIR Commissioner Joel L. Tan-Torres told reporters yesterday.
"Individuals and businesses will claim the deductions when they file [their income tax] on April 15 next year. These [revenue losses] will be reflected in 2010."
Mr. Tan-Torres said this, along with the impact of some legislated tax cuts, should mean a review of the BIR’s P875.1-billion collection goal for next year.
"It (impact of storms) was not anticipated. We already came up with our position which states that there are things that were not factored in [the 2010 target]. Other revenue-eroding measures were also not incorporated in the target," he said without citing specific figures.
Mr. Tan-Torres said they would be implementing administrative measures to boost collections and to compensate for the foregone revenues.
Sought for comment, Finance Undersecretary Gil S. Beltran said the BIR’s 2010 target could still be revised but stressed the need to verify taxpayers’ deduction claims.
"Yes (the BIR collection target can be changed), because the revenue base has been eroded by the exemptions given by Congress. We have to make adjustments to make it more realistic," he said in a telephone interview.
"We are still assessing the figures. Taxpayers lost money because of the storms but they (the BIR) have to check if the claims are true. They will have to look into the records. The claims should be verified."
The BIR, which accounts for around three-fourths of the government’s tax revenues, is required to collect P798.5 billion this year but officials have stressed that the goal would not be reached due to a slower economy and too many tax cuts.
As of October, the bureau had collected P612 billion.
Under the Tax Code, losses "sustained during the taxable year and not compensated for by insurance or other forms of indemnity" can be deducted.
To qualify, the losses should have been incurred in relation to trade, profession, or business and caused by fires, storms, shipwrecks, or other casualties.
Taxpayers should submit documentary evidence within 45 days after the date of the event which caused the loss.
Tropical storm "Ondoy" devastated parts of Metro Manila and nearby provinces last Sept. 26, while typhoon "Pepeng" hit the north a week later. Both caused around P206 billion worth of damage based on World Bank estimates and killed close to a thousand people. — Alexis Douglas B. Romero, BusinessWorld
"The casualty loss [incurred by taxpayers] is P21 billion. If converted into tax payment, that would be around P6 billion. That would represent the income tax deduction," BIR Commissioner Joel L. Tan-Torres told reporters yesterday.
"Individuals and businesses will claim the deductions when they file [their income tax] on April 15 next year. These [revenue losses] will be reflected in 2010."
Mr. Tan-Torres said this, along with the impact of some legislated tax cuts, should mean a review of the BIR’s P875.1-billion collection goal for next year.
"It (impact of storms) was not anticipated. We already came up with our position which states that there are things that were not factored in [the 2010 target]. Other revenue-eroding measures were also not incorporated in the target," he said without citing specific figures.
Mr. Tan-Torres said they would be implementing administrative measures to boost collections and to compensate for the foregone revenues.
Sought for comment, Finance Undersecretary Gil S. Beltran said the BIR’s 2010 target could still be revised but stressed the need to verify taxpayers’ deduction claims.
"Yes (the BIR collection target can be changed), because the revenue base has been eroded by the exemptions given by Congress. We have to make adjustments to make it more realistic," he said in a telephone interview.
"We are still assessing the figures. Taxpayers lost money because of the storms but they (the BIR) have to check if the claims are true. They will have to look into the records. The claims should be verified."
The BIR, which accounts for around three-fourths of the government’s tax revenues, is required to collect P798.5 billion this year but officials have stressed that the goal would not be reached due to a slower economy and too many tax cuts.
As of October, the bureau had collected P612 billion.
Under the Tax Code, losses "sustained during the taxable year and not compensated for by insurance or other forms of indemnity" can be deducted.
To qualify, the losses should have been incurred in relation to trade, profession, or business and caused by fires, storms, shipwrecks, or other casualties.
Taxpayers should submit documentary evidence within 45 days after the date of the event which caused the loss.
Tropical storm "Ondoy" devastated parts of Metro Manila and nearby provinces last Sept. 26, while typhoon "Pepeng" hit the north a week later. Both caused around P206 billion worth of damage based on World Bank estimates and killed close to a thousand people. — Alexis Douglas B. Romero, BusinessWorld
