BIR Probing Insurance Companies
Byline: Jun Ramirez
The Bureau of Internal Revenue (BIR) decided yesterday to investigate insurance companies to determine causes of lower income and business tax payments last year.
BIR Commissioner Lilian B. Hefti issued the directive to Large Taxpayer Service (LTS) chief Romulo Aguila Jr. after meeting representatives of insurance firms to find out the reasons for the huge reduction in tax payments equivalent to about 12 percent in 2007 compared to the previous year's total.
In the case of pre-need companies, the reduction in tax payments was more than 50 percent.
"Good economic indicators in 2007 are inconsistent to the trend of the insurance industry's tax performance. There is no growth rate in their tax payments and this is quite bothering,'' Hefti said.
Aguila and Alvin Galanza, chief of the LTS regular division, identified several factors that affected tax performance in the industry, including its refusal to withhold the creditable Value-Added Tax (VAT) on foreign payments despite the existing revenue regulations providing for the withholding of VAT. …