BIR to use 'benchmarking' for efficient tax collection

To increase the level of voluntary compliance among taxpayers, the Bureau of Internal Revenue said it will use benchmarking as a tool to know if a taxpayer is paying is paying the right amount of taxes. The voluntary compliance tool will help revenue enforcement officers assess the level of compliance through taxpayers’ various declarations, BIR Commissioner Kim Henares said. The benchmarking project is part of good tax administration and for the bureau to know who the taxpayers are and if they are registered and reporting the right income and paying the right amount of taxes, Henares said. The bureau said it will use the benchmarking method to assess a taxpayer’s level of compliance by comparing it with industry standards or benchmarks. This tool will help the BIR identify who should first be audited and, in the process, increase compliance, Henares noted. "Benchmarking is basically a measure or tool to detect tax leakages and improve collections on VAT, income and other taxes, said Henares. “The tool will help plug the loopholes and increase voluntary compliance resulting into higher tax collections and thus, higher tax effort ratio," she added. — VS, GMA News