The Bureau of Internal Revenue or BIR missed its tax collection target last year by P53.8 billion. It failed in its goal across the board – value-added tax (VAT) short by P38.187 billion; income tax by P9.715 billion; percentage tax by P4.098 billion; and excise tax by P3.915 billion.
Congress is now investigating this biggest tax collection failure in the country’s history.
As a kneejerk reaction, BIR has issued a new Memorandum dated January 8, 2008 mandating local government units or LGUs not to issue or renew business and professional permits without first submitting a number of BIR requirements.
This memo was advertised in leading newspapers only today; the period for business permit renewals ended yesterday.
First, the Memo is clearly late. Renewal of business permits has commenced on the first working day of the month. And I got a report from Atty. Jhopee Agustin of the Business Bureau that the business licensing went smoothly.
Second, requiring applicants to comply with the many BIR requirements such as copies of the Income Tax Returns, monthly and quarterly Value-added Tax Returns, etc. smacks of red tape to say the least. Putting more obstacles to professional and business applicants is contrary to our policy to limit bureaucratic requirements and hasten the processing of such permits.
Third, this BIR policy would only encourage businesses not to seek permits and to go underground, thereby negating our efforts to register all businesses in the city or in the country for that matter.
I believe that the BIR should squarely admit the blame for its own failures. It should not pass on the burden of collecting taxes to the LGUs.
In a sense, the BIR wants LGUs to play Gestapo to apply state terror on professionals and businesses applying for their permits.
This is most deplorable and highly objectionable.
I am certain that LGUs would want to help the BIR in its tax revenue efforts. But certainly, not this bullying way.
Almost 99 percent of about 40,000 business registrants in the city are micro and small and medium enterprises or MSMEs. They may seem to be lowly businesses but they contribute highly to jobs generation and taxation. They are the asset that makes our city grow. They are our development partners.
I believe that we should treat them fairly and not be burdened with so many regulations and requirements.
In missing its collection target last year, BIR has clearly shown its folly and bias.
The biggest failure in last year’s missed collection goal was the Large Taxpayers Group of the BIR. This group handles taxes for the Top 1,000 corporations. This group failed to collect P38.8 billion from the big businesses. From its target of P469.7 billion, this group collected only P430.9. This shortfall represents 70 percent of the total missed target of the BIR.
Who heads this special group? No less than the BIR Commissioner herself, Lilian Hefti.
Here is my advise to her. Run after tax evaders! Collect from the rich and big taxpayers first, before pounching on the small fries! And do your job first before ordering LGUs how to do theirs!