Finance department wants BIR, LGUs to share taxpayer info

MANILA, Philippines - The Finance department has ordered the tax bureau and local government units to exchange taxpayer and tax payment information in line with its goal to boost national and local government revenues. Finance Department Order 9-08, signed by Finance Secretary Margarito B. Teves last March 26, has been disseminated to tax bureau officials and employees through Revenue Memorandum Circular No. 44-2008 dated May 5. Mr. Teves had ordered the tax bureau to provide the local governments a list of taxpayers classified by industry and a list of closed businesses. The tax bureau also needs to prepare a list of taxpayers with discrepancies in gross sales or receipts — as discovered through reconciliation with local government records — as well as a list of taxpayers registered with it but not with local governments. The local governments, meanwhile, must provide the tax bureau a list of taxpayers classified by industry, a list of closed businesses, and a list of tax declarations of real properties. Nelson M. Aspe, Bureau of Internal Revenue (BIR) deputy commissioner, told BusinessWorld the information sharing would help the agency achieve this year’s collection goal of P844.95 billion. City and municipal treasurers have long lobbied to be given access to BIR records, pointing to the need to make sure that taxes paid to city hall are accurate. They suspect that gross sales or receipts — the basis for business taxes paid to city hall — as reported to the tax bureau and city hall are different. The BIR, meanwhile, has been bugged by problems of taxpayers acquiring mayor’s permits to operate yet failing to register with it. An exchange of information would have been mutually beneficial but the BIR had said it could not just open its data to anyone unless the President ordered it. In August last year, President Gloria Macapagal Arroyo issued Executive Order 646 that ordered information sharing between the bureau and local governments. Department Order 9-08 provided the implementing rules to the presidential directive. Mr. Teves also required the BIR to provide the Bureau of Local Government Finance, which supervises the treasurers, a list of taxpayers classified by locality/industry and a list of closed firms. A treasurer can write the revenue district officers to request access to income tax records, value-added tax returns and "percentage tax returns pertaining to any person, partnership, corporation or association subject to local taxes, fees and charges." The information obtained can only be used in the assessment and collection of taxes and cannot be divulged to just anyone. The tax chief, meanwhile, can also write the treasurers to ask for a list of contractors or suppliers, market vendors, cockpit operators, and quarry operators or owners. He or she may also ask for data on cost and volume of production, and gross incomes. The tax chief is similarly required to ensure that data obtained is used only to assess and collect taxes and is prevented from divulging the information to anyone. - Ruby Anne M. Rubio, BusinessWorld