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Tax chief sets BIR reshuffle


Posted on 11:45 PM, December 17, 2009 [ BusinessWorld Online ]

BY ALEXIS DOUGLAS B. ROMERO, Reporter


CLOSE TO 60 SENIOR PERSONNEL will be reshuffled at the Bureau of Internal Revenue (BIR) next year, and its Large Taxpayers Service’s (LTS) complement increased, as part of a renewed effort to boost revenues.

The new assignments, BIR Commissioner Joel L. Tan-Torres said on Wednesday, would be based on performance assessments and were aimed at generating fresh strategies.

"We will implement a massive reshuffle effective next year. There was an understanding between the commissioner and regional directors that the KPIs (key performance indicators) will be the basis for reorganization," he told reporters.

"It’s good to have reorganization based on performance. It will infuse new ideas and initiatives ... The performers were given more responsible positions while underperformers were moved to districts with lower goals. It will take effect on January 1."

Reviewed were collection performance, number of delinquent establishments closed, number of tax campaigns for taxpayers and accountants, linkages with local governments and other sources of third party tax information, and taxpayer satisfaction.

The reshuffle will be the first under Mr. Tan-Torres’ administration. The bureau last implemented one in March under his predecessor, Sixto S. Esquivias IV who resigned in October after admitting that this year’s targets would not be met.

"They (revenue personnel) may slacken [if they are not moved] ... It will also keep them independent," Mr. Tan-Torres said.

More personnel will also be assigned to the LTS to intensify the monitoring of big businesses.

"We are beefing up the large taxpayers group. We will assign two assistant commissioners and will increase the audit divisions from four to eight. This will allow us to enhance our collection initiatives," Mr. Tan-Torres said.

"We will monitor better the compliance of large taxpayers if we increase our manpower. It this group collects around 70% of our taxes then we should put more resources there."

At present, the LTS, which oversees corporations and individuals with a net worth of at least P300 million, is headed by an assistant commissioner.

Orders dated December 14 and furnished to reporters yesterday showed the reorganization would involve 57 personnel ranging from assistant commissioners to revenue district officers.

The office of the assistant commissioner for LTS has been divided into two: an assistant commissioner for excise large taxpayers and another for regular large taxpayers or non excise taxpayers. LTS Assistant Commissioner Zenaida G. Garcia will handle the former while Nestor S. Valeroso, currently the regional director for San Pablo City in Laguna, will take the latter post.

Other ranking BIR personnel to be transferred are Marissa O. Cabreros, head revenue executive of the LTS administrative and enforcement group who will become assistant commissioner for legal service; assistant commissioner for legal service James H. Roldan, who will be moved to the enforcement group; assistant commissioner for human resources Leonor S. Villalon-Rogers, to the policy and planning group; assistant commissioner for policy and planning Carolina G. Pesayco, to the human resource group; assistant commissioner for inspection service Eufrocina S. Casasola, to the financial and administrative service; assistant commissioner for enforcement Margaret Mary C. Lauron, to the inspection group; and assistant commissioner for financial and administrative service Zenaida B. Chang, who was named special assistant to the deputy commissioner for resource management.

Regional officers given new posts were Manila director Arnel S. Guballa who will be reassigned to Caloocan, Makati’s Alfredo V. Misajon who will be transferred to Manila; his post will be given to Caloocan’s Jaime B. Santiago.

Cebu director Rodita B. Galanto will be reassigned to San Pablo City, Laguna while Zamboanga director Glen A. Geraldino will be moved to Iloilo. Tacloban director Araceli L. Francisco will be transferred to Bacolod while Bacolod director Jose N. Tan and Iloilo director Albert B. Alocilja will be moved to Cebu and Tacloban, respectively. Rozil Lozares, who serves as technical assistant to the Deputy Commissioner for Operations has been appointed as Zamboanga regional director.

Olivia O. Lao, head revenue executive assistant (HREA) of the LTS-excise taxpayers, has been designated HREA of the BIR programs and compliance group while Valenzuela revenue district officer Artemio D. Aquino has been appointed chief of the excise taxpayers regulatory division. Conrado C. Lee, chief of the large taxpayers audit and investigation division, has been named assistant regional director for Cebu.

The rest consist of revenue district officers and assistant regional directors who were reassigned to other local offices.

The BIR missed its P810-billion target last year, collecting only P778 billion.

It is tasked to collect P798.5 billion this year and P875.1 billion next year. Officials have admitted that this year’s goal would be missed due to various tax cuts and a slower economy and have urged economic managers to review the 2010 target.

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BIR circularizes approval of Socialized Housing Ceiling from P300,000 to P400,000



RMO 30-299 circularizes the relevant portions of HUDCC Resolution No. 1, Series of 2008, approving the adjustment of the price ceiling for socialized housing, as per HUDCC Resolution No. 1, Series of 2008 promulgated on December 11, 2008.

Under HUDCC Resolution No. 1, Series of 2008 promulgated on December 11, 2008increasing the socialized housing loan ceiling of Low Cost Level 1-A had been increased from P300,000 to P400,000.

The newly adjusted price ceiling shall apply to all sales of real properties utilized for socialized housing, as defined under RA No. 7279 otherwise known as "Urban Development and Housing Act", and other related laws such as RA No. 7835 otherwise known as the "Compreshensive and Integrated Shelter Financing Act of 1994" and RA No. 7863 otherwise known as the "Home Guaranty Act of 2000", beginning January 1, 2009.

Read full text of RMO 30-2009 > > >


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BIR sets venue for large firms’ property-related taxes


Friday, May 22, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]


THE BUREAU of Internal Revenue (BIR) has designated revenue district offices (RDOs) as the venue for the filing of returns and payment of taxes due on transactions involving the property of large taxpayers.

The directive is embodied in Revenue Regulations (RR) No. 5-2009, uploaded on the bureau’s Web site last May 13.

The issuance amended RR 4-2008, which designated the Large Taxpayers’ Service (LTS) offices as the venue for the payment of tax dues on real estate deals sealed by large taxpayers.

RR 4-2008, however, retained RDOs as venue for the payment of real estate taxes of non-large taxpayers.

The latest revenue regulation effectively restored the set-up before Revenue Regulations 4-2008 was implemented.

Confusion

BIR noted that RR 4-2008 caused confusion among taxpayers since some of them were removed from or have just been incorporated into the LTS.

"During the implementation [of RR 4-2008] and with the recent delisting and enlisting of taxpayers who are to be classified as large taxpayers, it has been recognized that such differing rule has caused confusion to those who have been declassified as large taxpayers, as well as those who have to be recently enlisted as such," BIR said.

"The venue for the filing of tax returns and payment of taxes due on real properties is reverted to concerned RDO where the property is located."

The tax code defines large taxpayers as firms with value-added tax paid or payable of at least P100,000 for any quarter of the preceding taxable year; firms with excise tax paid or payable of at least P1 million for the preceding taxable year; firms with annual income tax paid or payable of at least P1 million for the preceding taxable year; or firms with withholding tax payment or remittance of at least P1 million for the preceding taxable year.

The tax bureau said the new regulations should provide uniformity in processing of real-estate transactions since this would cover both large and non-large taxpayers.

It added that the new set-up would enable the BIR to conduct "expedient" ocular inspection on the real properties involved. — Alexis Douglas B. Romero

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Large taxpayers unit boosted

Vol. XXII, No. 116 [ BusinessWorld Online ]

Wednesday, January 14, 2009 | MANILA, PHILIPPINES


Tax chief reverses predecessor’s order


IN A CONTINUING QUEST for bigger collections, the head of the Bureau of Internal Revenue (BIR) returned a number of firms to the jurisdiction of the Large Taxpayer Service (LTS) from Revenue District Offices (RDOs), overturning the order issued by his predecessor seven months earlier.


In Revenue Memorandum Order 1-2009 issued on December 10 last year, BIR Commissioner Sixto S. Esquivias IV said collection of tax payments from "re-enlisted" large taxpayers would be credited to the LTS starting last January 1.


This, in effect, reversed RMO 25-2008 issued by his predecessor, former Commissioner Lilian B. Hefti on May 26, 2008, which distributed big firms among the LTS and RDOs, in order "to bring equity in the sharein collection targets" among these BIR units.


In his order, Mr. Esquivias explained that, "relative to the programs of the BIR on goal rationalization, benchmarking and industry profiling, there is a need to expand the large taxpayer base under the LTS. For the first phase of the expansion, it is deemed necessary to prioritize the re-enlisting of large taxpayers [delisted under Ms. Hefti’s order] under the jurisdiction of the LTS."


BIR offices concerned have until the end of next month to implement the order "to give enough time for LTS office acquiring jurisdiction over the re-enlisted taxpayers to fully integrate the same in the formulation of their respective operational strategies."


Hence, taxes paid by large taxpayers starting last January 1 will be credited by the BIR revenue accounting division to the LTS from the RDOs.


Mr. Esquivias said in a phone interview yesterday that putting more big firms under tighter scrutiny by the LTS, which has been accounting for half of the bureau’s total collections, should result in the desired increase in collections.


"I think they should be placed back under the jurisdiction of the large taxpayers service. The idea is closer monitoring. I hope there will be higher collections," he said.


Targets


The government is targeting P1.36 trillion in revenues this year, consisting of P1.24 trillion in tax revenues and P128 billion in non-tax revenues.


The BIR is tasked to collect 73% of total tax revenues at P910.9 billion, while the Customs bureau has been entrusted with a P317-billion target. BIR’s target is already a downward revision from an original P968.3 billion, amid expectations of slower economic growth this year.


But even for last year, the BIR has argued that difficult economic conditions mean it would fall short of its P844.95-billion target, collecting P810 billion at most.


In the 10 months to October last year, BIR fell 4% short of its P671.349-billion target for that period, collecting P644.811 billion, data from the Finance department has shown.


The LTS was expected to contribute 47.7% to the BIR’s target last year at P403.05 billion, while revenue regions were expected to generate P407.26 billion. The LTS target was 6.24% less than the P429.86 billion collected by the unit in 2007.


Tammy Lipana, Isla Lipana & Co./PricewaterhouseCoopers chairman and senior partner, said "I can only surmise that, based on the BIR’s experience from June to November when they transferred some large taxpayers to district offices, collections from said taxpayers dropped. Thus, to improve monitoring and servicing of large taxpayers, the BIR decided to re-enlist them in the LTS."


Philippine Chamber of Commerce and Industry President Edgardo G. Lacson said "the reason why it [big firms under RDOs] is being reverted to the LTS is there was no firm criteria why large taxpayers were delisted. Some of them were complaining. BIR reacted to the sentiment and brought them back. If you are paying higher taxes, you deserve better service and better accommodation like less hassle and less harassment."


Former Finance Undersecretary Emmanuel P. Bonoan, who is now chief operating officer and vice-chairman for tax and corporate services of KPMG Philippines Manabat Sanagustin & Co., said: "I think the new BIR chief should be given the widest leeway to organize BIR with the caveat that taxpayers should not be overly inconvenienced." — Ruby Anne M. Rubio

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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.