MANILA – The Bureau of Internal Revenue (BIR) has suspended investigations of taxpayers, saying yesterday it needs to review policies and procedures in this regard after its head said last month that the practice has not improved collections.
The BIR said in a statement that it has recalled all mission orders (MOs) issued by its National Investigation Division (NID) and ordered the unit’s revenue officers to submit a list of all outstanding MOs, including those already cancelled and terminated.
“The order also suspended and/or terminated any further investigation, field audit, or any form of business visitation pursuant to the said MOs unless otherwise authorized in writing,” the statement read.
In a separate order, the BIR also directed the NID to submit a status report on all letters of authority (LAs).
An LA authorizes a revenue officer to examine a taxpayer’s books of accounts and other business records in order to determine if he has paid appropriate taxes.
“The bureau aims to improve current audit guidelines, policies and procedures — including reporting requirements governing tax audits/investigations — within the context of a responsive system of tax collection/enforcement measures,” the BIR said in its statement.
BIR Commissioner Caesar R. Dulay told reporters on Jan. 25 that LAs have not made significant contribution to collections.
“Because I feel personally that the letters of authority — they’re supposed to contribute to our collection efforts. But I don’t see much improvement. And some like the first time I came in, I had an inventory… matagal (the audit takes too long),” Mr. Dulay had said.
“Matagal hinahawakan (Revenue officers take too long to investigate). There’s a certain limit there: 180 days. That’s six months, then you come out with your report. Then you should assess if you feel that there is a deficiency tax for the tax payer.”
Tax Management Association of the Philippines President Raymund S. Gallardo welcomed the order when sought for comment. “That’s okay, since if it goes beyond 180 days, some have to explain to the Commissioner [why it is taking them long to audit a taxpayer],” Mr. Gallardo said in a telephone interview yesterday. “Mapapa-speed up ‘yung [It will speed up the] collections, since the BIR is asking for reasons why hindi natapos ang [they haven’t completed] investigations…”
The BIR raked in P1.779 trillion last year, 12.92% more than 2016’s P1.576 trillion. That was 97.27% of an original P1.829-trillion collection goal but bigger than the downward-revised P1.763 trillion target.
This year, the BIR has been tasked to collect P2.039 trillion.