Negosyante News

November 5, 2024 6:38 pm

BIR To Create New Tax Arm For Int’l Tax Collection

IMG Source: The Economic Times

The Bureau of Internal Revenue (BIR) wants to create a separate unit to focus on international tax collection, including onshore transactions of global e-commerce firms, to plug billions of pesos of estimated tax leakage.

 

Revenue Commissioner Romeo Lumagui Jr. said they are targeting to create the new tax arm within the year or the next.

 

“We are studying how to do this—if it [will be] an entire service or division and [what will be] the functions,” Lumagui said.

 

“We might have some limitations because we need to create plantilla items. So, again, that will have to be brought up to the [Department of Budget and Management] for approval,” he said.

 

“We need to establish a strong international tax practice that will look into the transfer pricing and the base erosion and profit shifting. So, that is why we really need this,” he explained.

 

According to Philippine Institute for Development Studies (PIDS), the digital economy has been growing unprecedentedly but digital transactions remain to be a challenge for the government. PIDS says this difficulty may be due to the content and structure of the Philippine taxation laws.

 

PIDS suggests four policy recommendations to address the issue, the first is to call for the optimization of existing tax authority over platforms. This move would include making platforms or payment systems as withholding agents of the income of online sellers or the value-added tax from customers.

 

PIDS also proposed the establishment of digital-ready tax administration, expanding the scope for investigation and liability, and increasing international engagements.

 

 

Source: Inquirer.net

Comments are closed for this article!

Subscribe to Our Newsletter and get a free pdf:

Sign Up for negosyante news

and receive a copy of The Crypto Cheat Sheet (PDF)
and NFT Cheat Sheet for free!

* indicates required