GMA Bares New Tax Incentive; No BIR Auditing for Payments 20% over Last Year Order Enhances Voluntary Tax Compliance
Byline: GENALYN D. KABILING
Taxpayers who pay at least 20 percent above their current income tax payments will now be exempted from internal revenue audit and investigation under a new incentive announced yesterday by Malacanang.
President Gloria Macapagal Arroyo issued Executive Order No. 399, ordering the Bureau of Internal Revenue (BIR) to implement the No Audit Program (NAP) for optimum tax compliance.
Acting on the proposal of Senate President Franklin Drilon, the President said the voluntary program aims to reduce corruption and administrative costs, while improving voluntary compliance "which lies at the foundation of any sound revenue program."
The executive order was released shortly after the President met with top revenue and customs officials and anti-smuggling czar Interior and Local Government Secretary Angelo Reyes in Malacanang where they discussed the governments efforts to boost its finances.
In the order, the President explained that voluntary tax compliance is enhanced when taxpayers are protected against unwarranted audit and investigation while tax evaders are punished.
"There is a need to establish a program to increase tax collections by providing taxpayers with incentives to voluntarily declare and pay higher taxes and by reducing administrative costs entailed from audit and investigation conducted by the Bureau of Internal Revenue," she said.
Along with the latest incentive program, Arroyo said the government will "fully and uncompromisingly sanction tax evaders."
The President also guaranteed that there will be safeguards in the executive order to prevent abuse or opportunism, and ensure consistency with industry benchmarks.
Among the safety measures is discouraging taxpayers from participating in the NAP after taxable year 2004 unless he is actually registered and starts its operations after 2004.
Under the order, any taxpayer who will discontinue participating in it or will not qualify under the NAP in any given taxable year shall be disqualified from further participation.
Exempted from BIR audit and investigation are taxpayers who meet the following conditions:
1. Growth rate of income tax payment for the current tax year from the previous tax year must be at least 20 percent.
2. Growth rate of income tax payment for the last quarter of the current tax year over the last quarter of the previous tax year must be at least 25 percent. …