MANILA, Philippines – A little less than 2,000 large taxpayers contributed more than half or 64% of the country’s total taxes in 2011, according to the Bureau of Internal Revenue.
One of the requirements for being classified as a large taxpayer is to have paid income tax of P1 million. The majority of these large tax payers are businesses, including the likes of diversifying conglomerate San Miguel corporation, media groups, like GMA Network Inc., and the largest mall developer in the country, SM.
According to BIR, the top tax-paying industries for 2011 were:
- Banks, P91.17 Billion in payments, 10% of all taxes
- Power, P55.22 Billion in payments, 6% of all taxes
- Real Estate, P48.35 Billion in payments, 5% of all taxes
For 2012, the BIR’s Large Taxpayers Service (LTS), the division managing these major payers, is tasked to collect a whopping P674.82 billion, representing 65.5% of total tax revenues.
“I think the opportunity to collect more from large taxpayers is there,” said Finance Secretary Purisima at the 2012 Tax Campaign Kick-Off for large taxpayers at Centris’ The Elements on Tuesday, February 28.
Gov’t missed 2011 target
In 2011, the BIR collected P924.1 billion, just 1.69% shy of its year-long goal of P940 billion.
“The one that really pulled us down is the taxes from government debt,” BIR Commissioner Kim Jacinto-Henares said.
She explainedthat since government didn’t have to borrow as much money, interest payments stayed low. This meant taxes on interest payments of government were also low.
“And as far as i’m concerned that’s a good reason for not hitting your target because you don’t really want to hit the target and ask government to spend money when it doesn’t need to spend it,” she said.
A trillionaire in 2012
The tax chief acknowledged there is room for improvement but was not unhappy with the 12.34% year-on-year jump in collections.
“Government will spend more this year and it should increase the velocity of the economy and that will increase tax collection,” she said.
Finance Secretary Purisima pointed out, “The increase in revenues is the largest in almost a decade without new taxes and asset sales.”
He explained that the yearly goals were purposely set to be “stretch targets.”
The target collection for 2012 is P1.066 trillion. Purisima explained, “If they hit it, Commissioner Henares will be the first person in the Philippines to be a trillionaire. This will be the first time any agency has had such a target.”
Again the workhorse of this target will be an estimated 1,963 companies by Purisima’s count. They are the large taxpayers.
To help reach the goal, the Large Taxpayer Service has come up with a 10-point program, including risk-based audits, improving the excise tax structure and strengthening compliance and monitoring.
Given the importance of the large taxpayers, it is no wonder BIR pulled out all the stops for its 2012 tax campaign kickoff targeted at the elite group.
Superstar Anne Curtis and funny man Allen K were brought in as entertainment. The event was perfectly timed, falling right before the April tax season. April is generally when BIR makes its biggest collections and the agency will be relying on its biggest taxpayers yet again. –Rappler.com