BIR to run after state firms, LGUs for P25-B back taxes

The Bureau of Internal Revenue (BIR) will run after delinquent state entities, whose unpaid dues reportedly reached close to P25 billion in 2006-2007. Citing reports by the Commission on Audit for 2006 and 2007, the BIR said in a statement on Wednesday that state-run firms, including their subsidiaries and various water districts, had incurred tax liabilities worth P13.26 billion in 2007 and P9.87 billion in 2006. Meanwhile, 56 local government units (LGUs) failed to remit P1.65 billion in the same years. BIR Commissioner Joel L. Tan-Torres declined to name the erring government entities, saying the bureau was still verifying if some have settled their tax dues. "I would not prefer to disclose it... It is possible that though these appeared as unpaid accounts, it could have been paid by the agencies, government-owned and -controlled corporations or LGUs after the reports were released," he said in a press briefing. The tax chief, however, said they have confirmed that some LGUs have yet to pay a total of P1.3-P1.6 billion worth of taxes. He declined to elaborate. His chief of staff, Marina C. de Guzman, said among the violations were failure to withhold and remit the tax on the salaries of their employees. "Some failed to withhold tax. Some were able to withhold tax but did not remit it to the BIR," she said in Filipino. Tan-Torres warned the heads of government agencies and and their accountants, finance officers and treasurers that failure to remit the right amount of taxes violates the Tax Code and is punishable by imprisonment and/or penalties. "After the validation, we will pursue the collection. We can file administrative cases, estafa and tax evasion cases," he said. Under the Tax Code, erring government agents tasked to deduct and withhold any internal revenue tax and to remit these may be slapped with a fine of P5,000-P50,000 or a jail term of six months to two years, or both. In the case of corporations, officers and employees can may be punished by a fine of as much as P100,000. Interagency verification Also yesterday, the BIR signed two cooperation agreements with state agencies as part of efforts to generate revenues. It signed a deal with the Land Transportation Office (LTO) and Insurance Commission (IC) to come up with a system for the effective collection of all insurance policy-related taxes. Under the agreement, the BIR, LTO and IC will develop a facility that can verify the registration of motor vehicles covered by compulsory third-party liability by proof of certificates of cover. The BIR said the system would "ensure the timely and effective collection of taxes due on these insurance policies of motor vehicles" and "provide interconnectivity and sharing of information among the parties." The Insurance Commission will host and maintain the gateway of the system, which will allow the verification of insurance certificates and the collection of fees due the BIR. "We don't want to see duplicated certificates of insurance. The public will no longer be prejudiced since this will help curb the proliferation of fake certificates," said LTO Assistant Secretary Arturo C. Lomibao during the signing ceremonies. "We want to ensure the integrity of the certificates. We want to monitor the certificates issued by the companies," said Insurance Deputy Commissioner Vida T. Chiong. The BIR also signed a separate deal with the Philippine National Police (PNP) to ensure the collection and remittance of withholding taxes of uniformed and nonuniformed personnel. The PNP Finance Service will update the exemptions by requiring personnel to file an updated certificate of exemption to determine the right tax dues, as well as the amount of taxes that should be withheld. "With this cooperation between the PNP and the BIR, instances of erroneous claims of personal and additional exemptions and deductions by the PNP personnel will now be a thing of the past," Tan-Torres said. The BIR, which accounts for around three-fourths of state tax revenues, must collect P830 billion this year. — Alexis Douglas B. Romero, BusinessWorld