BIR ordered to step up co-op audit
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 14 Oct 2019 16:24:44 +0000
The Department of Finance (DoF) has ordered the Bureau of Internal Revenue (BIR) to step up its ongoing audit of registered cooperatives in the country after finding out that tax compliance of the industry declined in 2018.
In a statement on Monday, the Finance department said BIR Deputy Commissioner Arnel Guballa reported that the tax agency has on record a total of 29,623 registered cooperatives whose tax compliance amounted to P3 billion combined in 2017, showing a decline of 5.4 percent to P2.84 billion in 2018.
Guballa added the BIR has also sent audit notices to 474 cooperatives across the country resulting in tax assessments amounting to P1.62 billion from which the agency has so far collected P250.35 million, according to DoF.
He also noted that the ongoing audit has uncovered enterprises with business models that are not cooperatives, but claimed to be one to enjoy tax perks.
The BIR official cited, for instance, a “cooperative” that the tax bureau had discovered to own several gasoline filling stations.
Upon hearing the BIR’s report, the DoF said Finance Secretary Carlos Dominguez 3rd directed the agency to intensify its efforts in determining which cooperatives are true to their mandate of promoting self-reliance and social change, and which ones have apparently organized themselves into cooperatives as a ruse to exploit the tax benefits granted to such organizations.
“You have the right to audit already, so please exercise it,” Dominguez was quoted as saying to BIR.
The DoF stressed that under the Tax Reform for Acceleration and Inclusion law, which took effect on Jan. 1, 2018, cooperatives, through the Cooperative Development Authority (CDA) are required to submit regular reports on the fiscal incentives they are enjoying.
The CDA, in turn, will submit a consolidated report to BIR for inclusion in the Finance department database created under the Tax Incentives Management and Transparency Act, it added.