The Finance Department said Tuesday said it will be “aggressive” in going after the Large Taxpayers Service unit to further boost government revenues and offset possible losses from the proposed lowering of personal and corporate income tax rates.
Finance Secretary Carlos Dominguez III said in a forum the LTS unit was the largest loophole in the collection of the Bureau of Internal Revenue.
“At the BIR, the largest loophole appears to be the Large Taxpayers Unit. This unit collects from the biggest industries in the country, even if it covers less than 3,000 companies,” Dominguez said in a forum in Makati City.
“If this unit can collect more efficiently, it should be possible to raise enough revenues at least to compensate for the lower tax rates,” he added.
Latest available data showed that the BIR collected P659.96 billion in the first five months of 2016, up 11 percent year-on-year. Collections from the LTS unit amounted to P402.45 billion, up P40.44 billion or 11 percent from a year ago.
Dominguez said Finance might double the coverage of the LTS from 2,800 companies.
“We are going to put more effort in tax collections and the biggest yields you get are in the relatively large taxpayers. I can’t see why there’s only 2,800. It should be more that that. BIR should expand that number,” he said.
Asked if the unit would follow President Rodrigo Duterte’s name and shame campaign in eliminating illegal drug usage in the country, Dominguez said the department would be “aggressive.”
“In our particular case, collecting tax is a little more complex than getting people to surrender for drugs. It’s going to aggressive but I don’t know if it will be as aggressive as that one,” he said.
“I hope that taxpayers do not require us to make it that aggressive. We expect more compliance. And we will be very happy if they just cough up the money that they owe us,” he added.
He said Duterte’s directive to the DoF are “not easy orders” to accomplish, especially when it comes to reforming the tax system to make it fairer for the middle class and bringing corporate tax rates to competitive levels.
“Tax reform is easy to imagine but it is the toughest to execute,” Dominguez said.