Alvarez on plan for more taxes: Hold it, boost collection first
Speaker Pantaleon Alvarez on Monday said the government should improve its revenue collection first before Congress approves the imposition of additional excise tax on oil.
In an interview over DZMM, Alvarez called on the Bureau of Internal Revenue (BIR) to first plug in the holes in the revenue collection before the government calls for more taxes.
Alvarez lamented that while the country’s value-added tax (VAT) stands at 12 percent, the collection was only at 4.3 percent of the gross domestic product (GDP), which was similar to the collection level in Thailand even though the latter imposes a measly seven percent VAT.
“Tingnan natin yung figures. Bakit mag-a-address tayo ng ibang bagay, kokolektahan natin, papatawan natin ng taxes yung ibang bagay para lang to cover the inefficiencies of BIR doon sa tax collection natin?” Alvarez said.
(Let’s look at the figures. Why would we address other matters, impose taxes on different things, just to cover up the inefficiencies of the BIR in our tax collection?)
Alvarez called on his colleagues to pass the bill seeking to raise VAT collections by creating an electronic data information connectivity system that would link the BIR and the businesses through cash-register machines and point-of-sales machines.
This bill recently hurdled the House ways and means committee.
Alvarez said VAT collection is affected by corruption in the BIR and the practices of businessmen who fake receipts to show zero tax liability.
“Kaya po yung koleksyon natin ganoon kababa doon sa VAT. So siguro, i-address din ng BIR, yung inefficiency ngayon. Hindi pupuwedeng hindi nila i-address yun at basta magdadagdag na lang ng taxes doon sa ibang bagay,” Alvarez said.
(Maybe that’s why our collection is so low on VAT. So maybe the BIR should address its inefficiency now. They cannot not address this and just impose taxes on different things.)
House Bill 4601 seeks to improve the tax administration system by creating the data linkages between the BIR and the country’s taxpayers, removing burdensome compliance requirements and promoting transparency in businesses with bulk transactions, according to the bill’s author Quirino Rep. Dakilo Cua.
“If enacted into law, the measure will greatly help in the early detection of misdeclaration done by unscrupulous taxpayers, thereby reducing or removing errors in the reporting of sales and purchases,” said Cua, the chairperson of the ways and means committee.
“Mandating interconnection between the BIR and appropriate government agencies will provide the BIR with third party information, easier VAT refund mechanism and data collection, all of which could be used in plugging leakages and overall efficiency of tax administration,” he added.
The Department of Finance pitched to Congress its revised tax package that “seeks to lower personal income tax, broaden the VAT base, adjust excise taxes on petroleum and automobiles, reduce the estate and donors tax, and provide an amnesty to past estate tax cases.”
The government is eyeing more taxes and broadening the VAT base as it seeks to lower the personal income tax./ac
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