The Bureau of Internal Revenue (BIR) said more or less 19 percent of revenue collection could come from the recently launched medium taxpayers segment (MTS) comprised of the top 500 individual and corporate taxpayers. This should further shore up revenue collection the rest of the year and help the agency meet its collection goal of P1.8 trillion.
According to BIR Assistant Commissioner Marissa O. Cabreros, around 60 percent of the bureau’s collection comes from the Large Taxpayers Service (LTS), and an estimated 17 percent to 19 percent of revenues can be collected from the MTS.
“Large taxpayers comprise around 60 plus percent of the entire bureau collection. Adding the medium taxpayers, which is targeted around 17 percent to 19 percent, it’s really a huge substantial database of collections for the BIR,” Cabreros told financial reporters.
The existing large taxpayers segment has around 2,600 taxpayers as of 2016, which increased to 3,000 this year. With the huge number comprising the LTS, the bureau said it will use the regions to monitor the other MTS.
“Eventually, around 500 taxpayers will be targeted for every region. I cannot remember the total number of the initial target because it will be tested first,” she added.
According to the BIR, the establishment of an MTS in the region will play a vital role in helping hit the revenue-collection target. Its creation is intended to strengthen the LTS by expanding its coverage.
During its initial implementation, the project will cover the top 500 taxpayers of 12 identified regions, including Quezon City, for a total of 6,000 medium taxpayers.
The top 500 taxpayers of the region composing the MTS are technically large taxpayers without the requisite notification from the Commissioner of Internal Revenue to be enlisted and classified as taxpayer. Their activities and compliance will be closely monitored by a special unit in the regional office headed by the regional director.
“Last 2016 the group contributed P26.778 billion in taxes, or roughly 21 percent of the region’s total actual collection of P130.59 billion. The region has a total of 350,534 registered taxpayers with a collection goal for 2017 of P143.9 billion. Emerging goal for the remainder of the year is P38.8 billion,” said BIR Regional Director Marina C. de Guzman.
Benchmarking allows the agency to detect leakages and improve the collection on value-added tax, income and other taxes. The tool will help plug loopholes and increase voluntary compliance resulting to higher tax collection and, thus, a higher tax-effort ratio, according to BIR Deputy Commissioner Nestor S. Valeroso.
A taxpayer found to be below industry benchmarks will be issued a notice to rectify his tax returns and improve compliance. The notice will also give the concerned taxpayer due process and the chance to rebut or prove otherwise the findings of the BIR.