Large taxpayers service cites four priority thrusts this year

REPORT FROM BUSINESSWORLD The Large Taxpayers unit of the Bureau of Internal Revenue (BIR) is prioritizing the collection of the deficiency taxes of banks and insurance companies in order to meet its P265-billion goal this year. Cesar Charlie C. Lim, head revenue executive assistant assigned to the regular large taxpayers unit, also told reporters late Tuesday that other priority actions to be undertaken in the remaining months of the year are more audits, industry and taxpayer profiling, and collection from delinquent accounts. Deficiency taxes by banks on their special savings accounts and foreign currency deposit units amount to P2 billion, while the documentary stamp taxes owed by insurance companies amount to P500 million, according to a document distributed by Mr. Lim to reporters. An "expanded" audit coverage should yield P1.2 billion; industry and taxpayer profiling, P400 million; and collection from delinquent accounts, some P776 million. Mr. Lim said "delinquent accounts" are composed of cases on which the courts have ruled in favor of the tax bureau. "The courts said we can now collect. What we will do is issue warrants for restraint and levy, seize his or her property, if the taxpayer will not pay." The Supreme Court ruled this year that banks’ special savings accounts are no different from time deposits and must be levied documentary stamp taxes. Meanwhile, an assessment of the tax bureau’s performance in the first half showed that collections of the percentage and documentary stamp taxes on insurance had been very poor. The same assessment showed the same trend afflicting collections of the value-added tax, excise tax, capital gains and documentary stamp taxes on real property and stock transactions, and the income tax of individuals engaged in business. Mr. Lim, who took over the regular large taxpayers unit in late July, reported that the large taxpayers service exceeded its July collection goal — the first time it did this year — during a command conference attended by President Gloria Macapagal-Arroyo, Finance and tax bureau officials last Monday. The large taxpayers service, which used to be headed by an assistant commissioner, has been broken off into its three component units — regular taxpayers, excise taxpayers, and division offices (Makati and Cebu) — that are headed by three head revenue executive assistants. The three report to Lilian B. Hefti, the bureau officer-in-charge. The large taxpayers service is assigned with collecting 65% of the tax bureau’s P765.8-billion collection goal this year. Mr. Lim, whose unit monitors the payments of 632 taxpayers, said his approach to collection involves mainly persuasion. "I’m sending letters to the presidents and the chief financial officers of companies, explaining to them why they need to pay taxes, and encouraging them to pay more taxes compared to the previous month and the previous year," he said. Mr. Lim said he will monitor the tax payments of firms under his watch, and will single those whose payments suddenly dip from the previous month or year.