With the implementation of the 12 percent Value-Added Tax, the Bureau of Internal Revenue is adopting the benchmarking method to determine taxpayers within industry groups who are paying below the minimum amount for tax compliance purposes.

BIR, in its Revenue Memorandum Order No. 4-2006 which prescribes the guidelines and procedures in the conduct of benchmarking, stated that the system will initially include top 200 taxpayers of each industry per district level based on gross sales as reflected in the tax returns, or actual gross sales/receipts as determined from sources within and outside the BIR, whichever is higher.

The memorandum, issued by Commissioner Jose Mario Buñag, provides that the number of taxpayers will be increased until all taxpayers of all industries shall have been fully covered and all should be complemented on or before end of calendar year 2008.

BIR said that priority industries for benchmarking covering taxable year 2004 are manufacturing (flour, softdrinks, sugar, cement and plastic), hardware, restaurants, shipping, IT providers, telecommunication, call centers, logistics providers (arrastre, stevedoring, freight, trucking and courier services), construction and petroleum.

The systematic program, aimed at leveling the playing field among taxpayers engaged in similar line of industry, will allow the BIR to enhance taxpayers' voluntary compliance by setting up a standard in measuring taxpayers' compliance with regard to income tax due and net VAT due of taxpayers in the same line of industry.

This will also enable the BIR National Office to effectively monitor the accomplishments of the regional and revenue district offices regarding benchmarking activities, the memorandum said.*NLG

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