The Bureau of Internal Revenue on Thursday lifted the suspension order on tax audits, after collection shrank in July, the first month in office of the Duterte administration.
BIR commissioner Caesar Dulay issued Revenue Memorandum Circular 91-2016, lifting the suspension order on tax audit operations of the agency.
Data showed BIR collection dropped 1 percent in July to P117.4 billion. It also fell 28 percent short of the P163.22-billion goal for the month.
“The conferred authority under the laws to the bureau for the collection of taxes, to be more effectively administered and implemented, requires some form of enforcement activities to ensure the collection of correct taxes at the times prescribed by law,” Dulay said in the latest order.
“As such, all field audits, field operations, or any for, of business visitation in execution of letters of authority/electronic letters of authority/audit notices, letter notices, or mission orders can already be conducted,” he said.
BIR issues an LoA to inform a taxpayer that he or she is being investigated for possible tax violations.
Dulay, in his first day in office on July 1, suspended all field audit and other field operations of BIR relative to examinations and verifications of taxpayers’ books of accounts, records and other transactions.
Tax Management Association of the Philippines president Benedict Tugonon said the tax examiners should be mindful of the president’s strong stand against corruption.
“We hope that when the audits will resume, the BIR examiners will be reasonable in raising tax issues and will not hesitate to resolve issues favorably for the taxpayers, if warranted based on the facts and law,” Tugonon said in a text message.
“Assessments should be issued only to collect deficiency taxes carefully determined to be correctly demandable from the taxpayer and not just for the sake of issuing a tax assessment, terminating the LOA or forcing taxpayer to lopsided settlements,” he said.
Tugonon also seek reforms in the way tax audits are conducted.
“The current state does not provide any incentive for taxpayers to voluntarily pay the correct amount of taxes. When highly compliant taxpayers are audited the examiners would insist on having a deficiency tax assessment and that it cannot be zero arguing that they are under pressure to collect pursuant to the lateral attrition law and the fear that they would be suspected of accepting bribe if there is no deficiency tax due,” Tugonon said.
“For this reason, we recommended to Congress the exemption of the BIR examiners from the Salary Standardization Law and we are proposing the repeal of the Lateral Attrition Law,” he said.