BIR warns tax evaders, poises closure of firms

The Bureau of Internal Revenue (BIR) is set to terminate its tax amnesty program and impose instead stiff sanctions against delinquent taxpayers which would include "closure of business establishments."

Internal Revenue Commissioner Guillermo L. Parayno Jr. said the tax amnesty program, dubbed voluntary assessment and abatement program (VAAP) will "be removed."

However, he declined to say when the program will be terminated.

Under VAAP, delinquent taxpayers or those who did not pay the correct taxes on capital gains, donor’s tax and estate tax are allowed to correct their tax declarations and forthwith pay the corresponding taxes.

VAAP was supposed to end last October but was later extended indefinitely as taxpayers sought to avail themselves of the program to escape criminal and administrative proceedings.

Parayno said there was a large number of those who availed themselves of the VAAP resulting in huge backlogs in the banks processing the tax returns.

He said once the BIR stops the VAAP or the tax amnesty program, "the bureau will start slapping interest and surcharges on the delinquent taxpayers."

Aside from criminal and administrative proceedings, Parayno stressed that the closure of erring business stablishments will be enforced.

Earlier, Parayno through the counter-checking of the value-added tax collections was able to snare delinquent taxpayers who later paid the correct taxes.

This could be the reason for the big backlog in the processing of tax payments by banks as those who did not pay the correct taxes availed themselves of the VAAP.

BIR officials admitted that VAAP availments resulted in huge revenue collections.

"That means our targets this year are realistic as long as taxpayers pay their dues and those who have not availed themselves of any incentives start paying, or else," Parayno said.

Meanwhile, institutions enrolled in the bureau’s electronic filing and payment system are to start paying on a staggered basis.

Based on Revenue Regulations 26-2002, taxpayers covered must file monthly withholding tax returns, except withholding of value added tax (VAT), monthly VAT declarations, monthly percentage tax returns, on specified dates based on its groupings.

Institutions under Group A must file their monthly withholding tax returns 15 days following the end of the month, and 25 days following the end of the month for their monthly VAT declaration and monthly percentage tax returns.

Those under Group A are banking institutions, insurance and pension funding, non-bank financial intermediation, activities auxiliary to financial intermediation, construction, water transport, hotels and restaurants, and land transportation.

The Group B institutions are manufacture of furniture, basic metals, chemical and chemical purposes, coke, refined petroleum and fuel products, electrical machinery and apparatus, fabricated metal products, food products and beverages, machinery and equipment, medical, precision, optical instruments, motor vehicles, trailers and semi-trailers, office, accounting and computing machinery, other non-metallic products, other transport equipment, other wearing apprarel, paper and paper products, radio, TV and communication apparatus, rubber and plastic products, textiles, tobacco products, metallic ore mining and non-metalic and quarrying.

These industries must file their monthly withholding tax returns 14 days following the end of the month, and 24 days following the end of the month in the case of monthly VAT declaration and monthly percentage tax returns.

Group C are those institutions engaged in retail sale, wholesale trade and commission trade, sale, maintenance, repair of motor vehicle, ale of automobile fuel, collection. Purification and distribution of water, computer and related activities and real estate activities. They should file monthly withholding tax returns 13 days following the end of the month and 23 days following the end of the month.