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MANILA - The Bureau of Internal Revenue will deploy personnel who would pose as clients to monitor tax compliance by the self-employed and professionals.
Commissioner Kim Jacinto-Henares told reporters that this is in line with Finance Secretary Cesar Purisima’s order to augment the annual average tax collections on self-employed individuals.
The BIR chief said she has tasked revenue district officers to ramp up their field operations and look at the compliance level of these individual taxpayers.
"We are asking our people in the field to monitor sole proprietors and professionals under their respective jurisdictions, and to take such enforcement procedures available to enforce the law," Jacinto-Henares said.
Two weeks ago, Purisima ordered the BIR to raise the annual average tax collection on self-employed individuals to P200,000 before the Aquino administration ends its term. To date, the average annual tax collection for said class of taxpayers stands at P5,500.
The BIR aims to issue more mission orders since going out on the field requires such authority from the chief or other high-ranking officials of the bureau.
"We already started with our policy cases. But this time, we will step up our enforcement power by expanding our coverage to General Professional Partnerships," Claro Ortiz, BIR head revenue executive assistant and overall coordinator for the Run After Tax Evaders Program, said.
Ortiz said the BIR will deploy revenue officers who would pose as patients for doctors, clients for law firms, and customers for single proprietors.
Such strategy entails more funding for the payment of goods and services of revenue officers posing as clients.
"We have been doing this already. But this time we will see to it that our enforcement power would be felt more clearly. We have to force them to issue official receipts. Thus, by calibrating the strategy of posing either as patients or customers we would know personally whether these taxpayers actually issue receipts, which is the very basis of their respective income tax returns," Ortiz said.
The BIR will employ a different approach vis-a-vis law and accounting firms and other professionals forming themselves as general professional partnerships.
"Now, since GPPs are not taxable unlike corporations, we can only ascertain their compliance once the partners have actually or constructively received their distributive shares," Ortiz said.
'General professional partnerships' are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.
GPPs are nevertheless, required to file ITRs for the purpose of furnishing information as to the share in the gains or profits which each partner shall include in their individual return.
Since filing tax returns of GPPs does not carry with it the payment of income tax, the filing alone will not be a sufficient basis for the income actually distributed to the respective partners, Ortiz said.
To ensure compliance among this class of taxpayers, the BIR would tighten its auditing on the ITRs filed by GPPs vis-a-vis the ITRs filed by the members of said partnerships, he said.
"This has to be looked at more tightly. We can no longer rely on the partner's individual returns. Thus, their ITRs should correspond to their audited financial statements and ITRs. Otherwise, there will be legal consequences," he added.
For the year, the bureau is eyeing to raise P222.28 billion from professionals, 15 percent higher than last year's P192.72 billion.
Individual income taxes account for over a fifth of the BIR’s collection, with the bulk coming from salaried individuals whose payments are automatically withheld by their employers.
The Professional Regulation Commission lists three million registered professionals in the country. Around 190,000 are doctors and lawyers; a class of taxpayers that earns much more than compensation income earners.
The BIR is tasked to collect P1.066 trillion in revenues this year to help the government cap its deficit at P279 billion.
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