'Oplan Kandado' targets 2 closures per quarter

MANILA, Philippines - The Bureau of Internal Revenue (BIR) wants some of its revenue district offices to padlock at least two business establishments per quarter as part of its ‘Oplan Kandado’ campaign.

BIR Commissioner Sixto Esquivias IV said the agency is counting on the campaign to meet its revised collection goal of P865.5 billion this year.

He said the agency would get tougher with violators of tax laws and padlock more establishments.

Under the program, business operations of non-compliant taxpayers will be suspended and their establishments will be temporarily closed if they will be found to have violated certain tax laws.

Esquivias said the agency will step up collections so it could raise more revenues by the end of the coming tax season deadline on April 15.

The BIR chief said that he would also put in place key performance indicators (KPIs) to guide and evaluate the performance of BIR Revenue District Offices (RDOs) in implementing the program.

He expects Class A and B revenue district offices to padlock at least two business establishments each quarter if they are found to be remiss in fulfilling their tax obligations; Class C district offices, one per quarter and Class D district offices, one in every four months.

So far, he said the BIR had padlocked 10 business establishments nationwide found violating tax laws especially on value added tax (VAT). He said there are many more non-complying taxpayers that the BIR hopes to close also for violating tax laws.

Among those padlocked under this program by the BIR are: 1) La Suerte Grocery & Bakery in Magalang, Pampanga for failure to declare more than P50 million in income in 2008; 2) Charmy Food Phils. Inc., a manufacturer of soybean products in Pasig City, for not declaring P40 million in sales for 2005 to 2008; and 3) Arra’s Fine Dining, a Korean Restaurant in Makati City for understatement of its taxable sales in 2008 by more than P20 million.

If the violation/s persist/s and the evidence so warrants, appropriate charges may be filed under the Bureau’s Run After Tax Evaders (RATE) Program, Esquivias said.

The BIR expects to raise P10 billion from the program through an expected increase in tax compliance.

Under the program, a business establishment can suspend or temporarily closed for various grounds such as failure to issue receipts or invoices; failure to file a VAT return, understating taxable sales or receipts by 30 percent more of the correct amount in the case of a VAT-registered taxpayer or failure to register the business.

Furthermore, the memorandum order stipulates that the closure of a business establishment shall last for at least five days and shall be in force until the violation is rectified by the taxpayer.

The closure order shall only be lifted by the BIR when there has been subsequent filing or amendment of returns with the payment of the tax as well as penalties.