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BIR eyes P10.7 billion from real estate tax collections


By Iris C. Gonzales (The Philippine Star) Updated February 11, 2010 12:00 AM

MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main revenue earner, expects to raise P10.7 billion from its so-called Project Rest In Peace (RIP) which intends to step up collections from estate taxes.

BIR Commissioner Joel L. Tan-Torres said as another measure to boost collections, the agency would increase the awareness of the public on the proper payment of estate taxes.

Project RIP is intended to let the legal heirs know that after the death of a loved one, follows the responsibility to comply with the laws of the government, he said. 

Through the project, the agency will monitor proper payment of the estate tax which the BIR for so many years has not given much attention to.

Citing data gathered from the National Statistics Office, the BIR said there were 403,191 number of deaths in 2004; 415,271 in 2005; and 389,081 in 2006.

However, based on BIR records, only 29,198 estate tax returns were filed in 2007; 29,863 in 2008; and 26,811 in 2009.

This statistics revealed a very low number of estate tax returns filed. Collections amounted to P649.9 million in 2007, P854.9 million in 2008 and P876.8 million in 2009.

“From the statistics gathered, it clearly indicates that there is a large potential to increase the number of estate tax returns filed, once these tax potentials are tapped. Once we implement this project, we can target to increase tax return filing to 250,000 that can generate more than P10 billion in estate tax collection,” Tan-Torres said.

The BIR chief said through the issuance of Revenue Memorandum Order 10-2010, the BIR shall undertake courses of action to closely monitor potential estate tax cases such as establishing linkages with public and private institutions to access information about the decedent, communicate with the administrator or the decedent’s family the need to file the estate tax return and to conduct a public awareness campaign on Project RIP.  

As provided for in the RMO, the Revenue District Office (RDO) shall be responsible for the pro-active monitoring of these cases by making linkages with civil registers, hospitals, memorial parks, cemeteries, funeral parlors, crematoriums, judicial clerks of courts, obituaries, life insurance companies and other financial institutions, to access and secure records of the decedents. All information gathered shall be submitted to the Audit Information Tax Exemption and Incentives Division (AITEID) for centralized data warehousing.   

The RDO having jurisdiction over the decedent’s principal residence shall send notification letter to the decedent’s family informing them of the requirements and due dates for filing of notice of death, estate tax return and payment of estate tax.

If the decedent’s family failed to comply with their obligation in filing the said return and in paying the said tax, the RDO shall undertake the necessary action to determine the estate tax obligation of the decedent and to protect the interest of the bureau.

The BIR’s National Investigation Division is tasked to track obituaries in the newspaper. It would also prepare a list of names of the decedents with complete information and determining who among in the list are the “high potential” cases, which have substantial properties and potential for substantial estate tax payments.  

The BIR is tasked to collect P830 billion this year, lower than the initial revenue goal of P875 billion. In 2009, the BIR collected P744.9 billion or P53.1 billion short of the revised target for last year of P798 billion.

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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.