Philippines Tax Authority Exceeds Targets

April 2, 2012 Taxation in Philippines

Performance of Philippines Tax AuthorityMANILA – The Bureau of Internal Revenue of the Philippines improved its own internal performance in 2011, reportedly completing more audits, collecting more back taxes, reducing processing times, and making greater use of its electronic filing systems.

The Bureau of Internal Revenue (BIR) of the Philippines has released its annual Performance Report, which contains assessments and results of the tax authority’s efforts to improve internal operations, and showed that tax collections in 2011 reached PHP 924.15 billion, and were approximately 12.3 percent higher than in 2010. The BIR attributes the growth to significant improvements in its own internal procedures and processing of tax data.

The BIR stated that in 2011 it had audited 15.01 percent of all claims for tax refunds, compared to the year 2010, during which the Bureau did not complete any such audits, and through the current financial year the BIR expects to audit approximately 25 percent of all claims lodged by taxpayers in the Philippines.

The Bureau said that in the 2011 year the processing time for producing taxpayer numbers or certificates of registration had fallen from eight hours to only one hour. The BIR also reduced the processing time for issuing tax receipts from eight hours to only 30 minutes.

In 2011 the tax agency collected 10.52 percent of all taxes in arrears in the Philippines, vastly exceeding its targeted collections which was originally planned to be only 5 percent.

The Philippines government’s Run After Tax Evaders (RATE) program also proved to be very effective in 2011, with almost 60 new criminal investigations filed against tax evaders in the country. In 2010 only 27 cases were initiated through the program. At the present moment the BIR estimates that the investigations could lead to collections of approximately PHP 40 billion in previously evaded taxes.

Throughout the year the BIR digitized over 84 percent of all tax returns filed throughout 2011 in the Philippines, which was vastly higher than the intended target of 75 percent.

Photo by Maerks