The Bureau of Internal Revenue (BIR) plans expanding the taxpayer base falling under the Large Taxpayers Service (LTS) to 3,000 or more this year, from only 2,320 at present.
According to BIR Commissioner Caesar R. Dulay, the expansion of covered entities under the LTS program is one of the priority areas to help boost expand the compliance of large companies in the country.
“About 3,000 maybe [or] more. We are working on it. But I signed papers already advising some taxpayers that we have identified to start reporting under the LTS,” Dulay said.
The BIR defines large taxpayers as companies registered with the Securities and Exchange Commission (SEC) with a capital of at least P300 million; multinational enterprises with an assigned capital of at least P300 million; publicly listed corporations and universal, commercial and foreign banks; among others.
In order for the base to expand, the BIR will categorize or classify companies either under the large- taxpayers bracket, or under the medium-taxpayer category or as small taxpayers.
According to the Department of Finance (DOF), the LTS accounts for 61 percent of total BIR collection, and its expansion will boost collection and support the national government and its spending program.
“As of 2016, there are 2,320 large active taxpayers registered with the LTS. These registered large taxpayers account for 61 percent of the total BIR collection. I find the number of registered large taxpayers rather small considering the rapid expansion of our economy,” Finance Secretary Carlos G. Dominguez III said.
The BIR is reviewing the LTS registry as a first step in identifying the companies belonging to the LTS. The BIR fell short of its collection target last year when this aggregated only P963 billion versus the collection target of P1.0035 trillion.
“My marching orders are to go out and find the other large taxpayers who have managed to avoid the registry. Those potential large taxpayers will enable us to better meet our collection target and demonstrate not only significant, but substantial improvements in our tax effort,” Dominguez said.