Archive for June 12, 2011

BIR chooses from 3 kinds of taxes, to collect more

By Mortz C. Ortigoza

URDANETA CITY –Despite her office dependency on the old zonal valuation, lawyer Beverly Milo, the Revenue District-6 (RD-6) chief, said her office can use the zonal valuation, tax declaration, and sale value to get the higher amount of taxes.

She said of the three, her office uses the “whichever is higher” formula that is mandated by the amended National Internal Revenue Code.

Milo said capital gain and documentary taxes are imposed by the BIR on the transaction entered by the vendor and the vendee.

She said capital gain and documentary taxes are 6%, 1.5%, respectively, of the transaction.

“Capital gain tax classified as final gain tax for the responsibility is now on the buyer to collect and pay the tax,” she stressed.

According to an insider at the tax bureau who asked anonymity, the “whichever is higher” formula is a measure resorted to by the BIR all over the country because of the tendency of the seller and buyer to collude to declare a manipulated lower amount on their Deed of Sale to avoid paying a higher Capital Gain and Documentary Taxes.

Milo said the tax agency looks also at the prevailing value of the real property in the area.

Real property includes land and buildings, and anything affixed to the land.

“Lots of factors like development of the areas and increase of economic activity justify (an increase taxes), increase of RPT (Real Property Tax imposed by the local government),” she said.

She said that it is a tall order for her office to collect the P975 million targets given to her by the BIR’s central office. But she was quick to add that she welcomes it.

Last year RD0-6 was given a tax target of P698 million but was able to exceed it by collecting more than P700 million because of the configurations of favorable events.

Milo said that the more than P200 million increases for this year was due to a good collection last year by her predecessor Merlyn Vicente because of the multi-million of pesos flood control projects. The projects were implemented by the national government after the eastern part of the province was washed-up by floods brought by typhoon Pepeng.

One of the factors for last year’s better collection was RD-6 stumbled on a tax delinquent corporation which was asked to past obligations, surcharges, and interest that ran up to millions of pesos.

June 12, 2011 at 11:48 pm 1 comment

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