BIR signs agreement with LGUs for sharing of taxpayers' data

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has signed an agreement with the country’s municipal treasurers and assessors for the sharing of taxpayers’ registration data and other necessary documents starting next year to check on their tax compliance and to be able to collect the right taxes from them.

BIR Commissioner Joel Tan-Torres said the move is part of the agency’s efforts to boost collections given the difficult economic environment.

Under the agreement, the BIR, the Philippine Association of Local Treasurers and Assessors Inc. (Phaltra) and the Bureau of Local Government Finance (BLGF) will share an updated list of taxpayers and retired business of the preceding year as well as the list of existing tax declaration of real properties.

Small and medium enterprises such as market vendors and cockpit operators shall also be under the BIR’s scrutiny.

Tan-Torres said the move is expected to churn in “billions of fresh revenues” for the agency as this would enhance its database.

In the past, businesses register only with the Department of Trade and Industry and the respective local government unit where they operate, skipping the registration with the BIR, Tan-Torres said.

This time, with the data-sharing, businesses have no choice but to register with the agency before they can operate their respective enterprises.

“With this agreement, the BIR is mandated to pose personnel in the different areas,” Tan-Torres said, referring to the different local government units.

This means that the BIR shall be permitted to install taxpayer assistance counters and help desks in city and municipal halls every January to faciliate renewal of business permits and answer queries necessary in the registration of business or practice of profession.

The BIR will require all taxpayers to indicate their community tax certificate number in their annual income tax returns and will furnish the local government units with a list of taxpayers, classified by industry for newly registered, and those whose business permits were renewed for the current year.

BLGF on the other hand, shall require the assessor’s office of the LGUs to provide BIR assessment rolls of taxable real properties for the taxable year with updates of real property assessments and such other property records as may be requested by BIR.

Victor Endriga, Phaltra president, said “only 30 to 40 percent of businesses are registered with the BIR.”

“The government could collect billions of pesos more from this,” Endriga said, referring to the implementation of the agreement by January 2010.

He said that in small towns, there are very few businesses that are paying taxes.

The BIR, which collects three quarters of the total tax take of government, is facing a collection shortfall of P56 billion, expecting to collect only P742 billion this year out of its full-year target of P798 billion.