BIR to run after employers who fail to remit withholding taxes

The Bureau of Internal Revenue said it would go after employers who failed to remit the taxes withheld from the salaries and allowances of their employees in 2005.

This after Negros Oriental Rep. Herminio Teves bared that the government was deprived of P43 billion in revenues last year by dishonest employees. He said the government expected to collect P127.3 billion in withheld taxes from the employees in the private and government sectors but only P84.3 billion had actually been collected.

Teves said a total of 7,072,314 employees had received amounts of P5,000 and above from their employers in 2005 but records of the BIR showed that only 2,885,500 employees have paid income taxes to the government. More than half of these employees, numbering 5,370,181, hold jobs in the private sector.

In view of this, BIR commissioner Jose Mario Buñag directed the legal services and the BIR’s withholding tax division to seek the help of the Department of Labor and the Social Security System in getting a complete list of the names of employers in the private sector to determine whether they are properly remitting the income taxes withheld from their employees.

Buñag also directed the concerned BIR officials to coordinate with the Department of Budget and Management and the Government Service Insurance System to determine which of the government offices are faithfully remitting withholding taxes and which are not.

Buñag said aside from being subjected to fines for non-remittance or delay in remittance of withholding taxes, employers may also be accused of tax evasion.

The BIR’s Enhanced Voluntary Assessment Program (VAP) implemented late last year had brought in an additional P2.014 billion in tax revenues, exceeding the P2-billion target.

The collection from the expanded value-added tax (EVAT) in December 2005 amounted to P1.036 billion, higher than the Department of Finance’s estimate of P970 million.

Buñag said he expects the BIR to improve on its tax collection efficiency this year as the new attrition law providing for incentives for better performance by government officials and employees takes effect. However, those BIR officers who fail to reach their revenue goals would face disciplinary action like being assigned to remote places unless they are able to fully explain their failure or even dismissal from the service.

Bunag said the increase of the VAT from 10 to 12 percent is also expected to boost revenue collections, thus enabling government to increase spending for infrastructure projects and economic development.