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ENTERPRISES can no longer obtain their business permits
and licenses from local government units (LGUs) if they
have not registered with the Bureau of Internal Revenue
(BIR).
This is
an offshoot of the information-sharing agreement that
LGUs and the BIR formalized through a department order
issued by the Department of Finance (DOF) last week to
help increase the revenue collection of the national
government.
Victor
Endriga,
Quezon City treasurer and president of the Philippine Association of
Local Treasurers and Assessors (Phaltra), said executive
director Ma. Presentacion Montesa of the DOF’s Bureau of
Local Government Finance (BLGF) is set to issue a
memorandum circular instructing local treasurers
nationwide to withhold licenses to operate from
enterprises that have yet to register with the BIR.
Endriga
said the order effectively reverses the current system
in which companies go to the Department of Trade and
Industry (DTI) or Securities and Exchange Commission
(SEC) first for business name registration, then to LGUs
for the license to operate and, last, to the BIR.
“The
problem is, there are companies which no longer go to
the BIR after securing their licenses and business
permits from LGUs,” Endriga told the BusinessMirror.
Now, to
ensure that all will be captured by the BIR, Endriga
said the second step would be the BIR registration.
Companies, he said, will have to show proof of
registration with the BIR, including the P500 fee,
before their application for mayor’s permit and license
to operate are entertained by LGUs.
The
circular, Endriga said, will make LGUs administratively
liable if they do not follow the new sequence for
business registrations.
Endriga
said Quezon City had gone ahead in implementing this scheme for two years now by asking
the BIR to assign personnel to City Hall to accept
payments for registration there.
Last
week Finance Secretary Margarito Teves signed the
department order implementing the sharing of taxpayers’
information between the LGUs and the BIR, an initiative
seen to, at least, double the BIR’s corporate tax base.
Endriga
said the move to require BIR registration for the
issuance of business permits and licenses by the LGUs
arose in discussions among representatives of the BIR,
DOF and Phaltra, who finalized the contents of the
department order.
The
order, pursuant to Executive Order 646, sets in motion
the exchange of taxpayers’ information between the BIR
and the LGUs either through soft copy in Excel format
using diskette, compact disc, e-mail or online through
their respective portal “for the purpose of evaluating
tax compliance and collection of correct amount of
internal revenue, local taxes, fees and charges.”
They
will furnish each other a yearly master list of updated
taxpayers as to the type of ownership classified by
industries for newly registered taxpayers of the
preceding year and taxpayers whose business permits were
renewed for the current year.
They
will also exchange the master list of retired businesses
of the preceding year, copies of assessment roll and
list of existing tax declarations.
The LGUs
will provide the BIR its copies on or before April 15,
while the BIR will submit its copies to the LGUs on or
before June 30. |
