Benchmarking at BIR Revenue Region No. 7 Quezon City

Quezon City – BIR Revenue Region (RR) No. 7, Quezon City led by Regional Director Jonas DP. Amora held its Regional Benchmarking Program Roadshow at Crossroad 77, Scout Reyes, Quezon City last August 28, 2012.

The Bureau of Internal Revenue (BIR) unveiled the tool last year to help revenue enforcement officers look into the declarations of taxpayers. As envisioned, the project will help the BIR increase voluntary compliance on the part of taxpayers by looking into their level of compliance through their various declarations with the tax agency.

Regional Director Amora welcomed the participants – taxpayers, tax agents and revenuers – while at the same time underscoring the benefits the Benchmarking Program will bring in terms of increasing revenue collection.

Benchmarking is basically a measure or tool to detect tax leakages and improve collections on VAT, income and other taxes. The tool will help plug the loopholes and increase voluntary compliance resulting into higher tax collections and thus, higher tax effort ratio.

As explained by Resource Speaker and Program Author Regional Director Nestor S. Valeroso, benchmarking gives the tax agency an idea of whether or not a taxpayer is paying the right amount of taxes by comparing its compliance level with the standards or benchmarks established from among the taxpayers within a particular sector or industry (e.g. real estate, restaurants).

Valeroso added that benchmarking will address the issue of low tax effort ratio in the country which translates to a revenue loss of around P218 billion per year. He likewise clarified that benchmarks will not give rise to minimum tax payments but instead will give a measure of how much a taxpayer within an industry or sector should be paying.

Under the project, a taxpayer found to be below industry benchmarks will be issued a Benchmarking Notice to rectify his tax returns and improve tax compliance. The notice will also give the concerned taxpayer due process and the chance to rebut or prove otherwise the findings of the BIR.

The benchmarking project will be implemented nationwide starting with a series of regional road shows. RR 7 – Quezon City, then under Director Valeroso, is a pioneer region in benchmarking. Other revenue regions are expected to come up with their own industry benchmarks.