No halt on tax audits this holiday season - BIR

Before, audits were halted during Christmas season to avoid tax examiners asking gifts, an official of industry group Tax Management Association of the Philippines said. Philstar/File  | By Prinz Magtulis via Philstar

           

MANILA, Philippines — There will be no let-up on the Bureau of Internal Revenue's (BIR) audits this holiday season as it aims to reverse a revenue slowdown toward "maximum" collection by the end of the year.

"All field audit and other field operations, including all enforcement activities, shall continue during this holiday season," Revenue Memorandum Circular 109-2016 dated November 7 stated.

"It is reminded that all efforts should be directed to ensure maximum revenue collection throughout the year," it added. 

In previous years, BIR stops audits from December 15 until January 1 of the following year.

Eleanor Roque, a director of industry group Tax Management Association of the Philippines, said halting audits during Christmas season before was meant to avoid "tax examiners asking gifts."

"But I guess now, given the promises and the declarations of the new administration, taxpayers are assured that will not happen or if it does, they have ways to report it," she said in a phone interview on Wednesday.

BIR, which accounts for around 80 percent of state revenues, had fluctuating performance since the Duterte administration took over on June 30.

It increased revenues by one percent in July, a seven-month low, before recovering to a 10-percent uptick the following month. In September, it slowed again to one percent.

It brought the nine-month tally to P1.17 trillion, still up 9 percent year-on-year, data showed. The tax agency targets to collect P1.62 trillion this year.

Sought for details, BIR Assistant Commissioner Marissa Cabreros said the order covers not only tax audits, but also other "usual activities of the office where they go visit premises of taxpayers."

Audit happens only when taxpayers are given letters of authority that show if BIR found some proof of tax misdeclaration, which in turn, could lead to being sued.

Other tax activities include tax mapping programs to verify if establishments are following tax rules, and Oplan Kandado, which padlocks erring shops.

"Some (establishments) may be closed, but others will be open especially those whose peak activity is the season such as malls, traders, retailers and tiangges," Cabreros said in a text message.

Earlier, she said BIR collections slowed because of the Duterte administration's decision to halt all tax audit for two months upon taking over, believing some of them has been abused by its own examiners.

This time, Cabreros said BIR agents are under strict orders to conduct only business in tax examinations.

"Remember too that Commissioner (Caesar) Dulay has a strict No Gift Policy...and he has created a special disciplinary committee that looks into the activities of our field officers," she said.

For her part, Roque said it also depends on the participation of taxpayers themselves.

"It takes two to tango. The avenues to report are there, but I guess it also depends on the willingness of the taxpayers to use them to report (erring BIR examiners)," Roque said.

She also said she recognized the need for BIR to finish all assessments before the end of the year, but added this should be done "in a legal way."

"We always tell our clients to prod examiners to just go to the books and do everything legally," said Roque, also tax head of auditing firm P&A Grant Thorton.