Tax Administration


refers to the management of the tax
system.
Tax administration of the national tax
system in the Philippines is entrusted to
the Bureau of Internal Revenue which
is under the supervision and
administration of the Department of
Finance.
ADMINISTRATIVE AGENCIES
Department of Finance

Responsible for the fiscal policies and
general
management
of
the
government’s financial resources.
Has supervision and control of the ff:
Bureau of Customs (Description below)
Bureau of Internal Revenue


It exercises vast and broad legislative
and administrative powers involving the
assessment,
collection
and
enforcement of taxes imposed by
NIRC, and other tax laws and
regulations.
primary revenue-raising agency of the
government, collecting annually about
80% of total government revenues
Bureau of Internal Revenue
Organization and Composition

BIR shall be under the supervision and
control of Department of Finance
 Powers and duties:
1. Assessment and collection of ALL
NATIONAL INTERNAL REVENUE
TAXES
2. Enforcement
of
all
forfeitures,
penalties, or fines.
a. (in case of noncompliance of a
taxpayer)
3. Execution of judgement in all cases
decided in its favor by the Court of Tax
Appeals and the ordinary courts.
4.
5.
6.
7.
a. in case of disputes of BIR and
taxpayer, and the court favors
the former which has the power
to execute the same.
Assignment of internal revenue
officers and other employees to other
duties
Provision and distribution of forms,
receipts, certificates, stamps, etc. to
proper officials
Issuance of receipts and clearances
Submission of annual report,
pertinent information to Congress and
reports to the Congressional Oversight
Committee in matters of taxation
CHIEF OFFICIALS OF THE BUREAU OF
INTERNAL REVENUE
1) 1 Commissioner (Romeo Lumagui Jr.)
 APPOINTED BY THE PRESIDENT
 A special service for large taxpayers
called the Large Taxpayers Service
(LTS) is under the Office of the
Commissioner. LTS collects about 53%
of total BIR collections
2) 4 Deputy Commissioners, each to be
designated to the following:
 APPOINTED BY THE PRESIDENT
UPON RECOMMENDATION OF THE
COMMIS. AND APPORAVAL OF DOF
SECRETARY
a) Operations group
1. Maridur V. Soriano
b) Legal Enforcement group
2. Marissa O. Cabreros
c) Information Systems Group
3. Ma. Rosario Charo G. Enriquez-Curiba
d) Resource Management Group
4. Teresita M. Angeles
The Commissioner, Deputy Commissioners,
together
with
thirteen
Assistant
Commissioners for the different Services,
comprise the senior level of administrative
authority of the BIR.
ORGANIZATION
REGIONS AND
OFFICES
OF THE REVENUE
REGIONAL DISTRICT









National Office
 General direction, guidance and control
of the entire operation
FIELD OFFICES: REGIONAL OFFICE
 19 Revenue Regions
 Administers and enforces internal
revenue laws including the assessment
and collection of all internal revenue
taxes, charges and fees from taxpayers
within the region's jurisdiction, as
well as ensures proper and effective
implementation of National Office's
policies and programs within the
Regional Office.
 Each Revenue Region (Regional
Office) is headed by a Regional
Director (assisted by Assistant
Regional Director) who oversees the
performance of the following regional
offices:
 Assessment Division
 Collection Division
 Legal Division
 Finance Division
 Administrative
and
Human
Resources Division
 Special Investigations Division
 Document Processing Division
115 Revenue District offices
 Headed by Revenue District Officers
 Under the supervision of Regional
Director
 Tasked for field works like assessment
and collection
GENERAL FUNCTION:
Provides frontline assistance and service
to taxpayers
Pre-processes
and
encodes
key
information from returns/ payment forms
Conducts field audit investigation of tax
cases
Undertakes collection of taxes through
summary remedies
Manages forfeited properties/acquired
assets within the RDO's jurisdiction
 implement programs, methods and
procedures necessary for the efficient,
effective and economical assessment
and collection of internal revenue taxes
in the revenue district in accordance
with the policies, standards and
guidelines prescribed by the National
Office and Revenue Regional Offices.
 composed of field men and examiners
performing assessment work and
collection
agents
and
clerks
performing collection work
 personnels with direct contact to the tax
payer
 Two regions with Large Taxpayers
District Offices
 Four regions with Revenue Data
Centers.
OTHER AGENCIES TASKED WITH TAX
COLLECTIONS
OR
TAX
INCENTIVES
RELATED FUNCTIONS
1. Bureau of Customs (BOC)
 administers collection of tariffs on
imported articles and collection of the
Value Added Tax on importation (Tariffs
and Customs Code (TCC)).
 BOC is under the supervision of the
Department of Finance.
 The Bureau of Customs is headed by
the Customs Commissioner and is
assisted
by
five
Deputy
Commissioners and 14 District
Collectors.
2. Land Transportation Office
 Tasked to collect registration fees and
motor vehicle tax.
3. Board of Investments
 lead the promotion of investments in
the Philippines by assisting Filipinos
and foreign investors to venture and
prosper in desirable areas of economic
activities.
 supervises the grant of tax
incentives
under the
Omnibus
Investment Code.
 The BOI is an attached agency of the
Department of Trade and Industry
(DTI).
 composed of five full-time governors,
excluding the DTI secretary as its
chairman. The President of the
Philippines shall appoint a vice
chairman of the board who shall act
as the BOI’s managing head.
4. Philippine Economic Zone Authority
 created to promote investments In
export-oriented
manufacturing,
industries in the Philippines and,
among other myriads of functions,
supervise the grant of both fiscal and
non-fiscal incentives.
5. Local Government Tax Collecting Unit
 Provinces, municipalities, cities and
barangays also imposed and collect
various local taxes, fees and charges
to rationalize their fiscal autonomy.
 Provincial
treasurers,
city
and
municipality treasurers, provincial and
city assessors, provincial and city board
of assessment appeals, and central
board of assessment appels.
6. Fiscal Incentives Review Board
 oversight function on the administration
and grant of tax incentives by the
Investment Promotion Agencies and

other
government
agencies
administering tax incentives.
Approves and disapproves grant of tax
incentives to private entities and
subsidies
on
GOCCs,
gov
instrumentalities and commissaries,
and state universities and colleges.
TAXPAYER
CLASSIFICATION
FOR
PURPOSE OF TAX ADMINISTRATION
1. Large taxpayers – supervised by the
Large Taxpayer Service of the BIR
national office.
2. Non-large taxpayers – supervised by
the respective Revenue District Office
where the business, trade or profession
of the taxpayer is located.
POWER OF THE COMISSIONER
INTERNAL REVENUE
OF
TAX COLLECTION SYSTEM


BIR adopted the "self- assessment
system" when Republic Act 2343 was
enacted in 1959.
Republic Act 8424 otherwise known as
the Tax Reform Act of 1997 retained
this principle.
Self-Assessment System


Taxpayer calculates the tax by himself
or through an accountant, fills up his tax
return, files it with the proper tax office,
and pays the tax due thereon upon
filing.
The resulting tax a "self-assessed" tax.
On the whole, however, the methods of
collection utilized by the BIR may be classified
into two (2) major categories:
1. collection through voluntary compliance
and;
2. collection by enforcement.
1. Collection
through
voluntary
compliance
o The act of tendering the payment
of the self-assessed tax is
referred
to
as "voluntary
compliance"
or
"voluntary
payment."
2. Collection by enforcement
o Collection by enforcement is
conducted
through
the
identification of sectors of
business or industries, and/or
segments of economic activities
where the degree of compliance
is low, and the subsequent audit
or investigation of enterprises
and companies that are part of
these selected industries.
TAX COLLECTION SYSTEMS
A. Withholding system on income tax
 the payor will withhold the tax on the
taxable income before releasing to the
payee and remits the same to the
government.
a. Creditable withholding tax –
Estimated tax the government
requires employers to deduct
from
the
employees
compensation income.
b. Expanded withholding tax –
estimated tax the government
required to deduct on certain
income payments made by
taxpayers engaged in business.
c. Final withholding Tax – a system
of tax collection wherein the
payors are required to deduct
the full tax on certain income
payments.
B. Withholding system on business taxwhen the national government and its
instrumentalities,
and
GOCCs
purchase goods and services from
private suppliers, the law requires
withholding of the relevant business tax
(e.g., VAT or percentage tax).
C. Voluntary compliance system –
taxpayers calculates their own tax, files
the same through income tax returns
and pays to the government.
1. “Self-assessment method”
D. Assessment of enforcement system –
government identifies noncompliant
taxpayer, assess their tax due including
penalties, demands the taxpayer to
voluntarily
comply
or
enforces
collection by coercive means such as
summary proceeding or judicial
proceeding when necessary.
TAX ADMINISTRATION

Refers to the manner or procedures of
assessing and collecting or enforcing
tax liabilities
 Tax administration is composed of:
1. Assessment – official action of an
officer
authorized
by
law
in
ascertaining the amount of tax due
from a taxpayer. Involves:
 Computation of tax due
 Giving of notice to the taxpayer
(Preliminary or Final Assessment
Notice)
 Making of demand for the payment
of tax or deficiency (Formal Letter
of Demand)
- Presumed to be pursuant
with the law making it legally
valid and enforceable against
the taxpayer, unless he files
a protest.
o Burden of proving
the illegality of an
assessment
rest
upon the taxpayer.
 FAILURE TO FILE A RETURN –
the commissioner can authorize
examination of the taxpayer.
Whereby the tax or any
deficiency assessed is payable
upon notice and demand from the
commissioner or his authorized
representative.
 Any return, statement, or
declaration filed in any office
authorized to receive the same
shall not be withdrawn
 The
same
can
be
amended, modified or
changed within 3 years
from date of filing
provided that it is not under
notice
of
audit
or
investigation.
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