The local government treasurers specifically sought the authority to apprehend business establishments that do not issue receipts to their customers.
Quezon City Treasurer Vic Endriga, president of the City and Municipal Treasurers’ Association of the Philippines, decried that the BIR lacks the manpower to inspect service and business establishments, including those based in Metro Manila and other key cities, that results in huge revenue losses for the government.
He noted that the less than 3,000 field personnel of the BIR are not adequate to cover the inspection of some 800,000 business and service establishments nationwide, hence, their audit work are mostly concentrated on large and medium companies that account for less than one percent of the total number of businesses.
As result of the BIR’s insufficient manpower, the bulk of businesses escape inspection and investigation, Endriga added.
"In fact, many businesses, particularly the smaller ones, are not registered with the BIR. After getting clearances and permits from the Departments of Trade and Industry and Local Government, these operators no longer register with the BIR," he said.
He pointed out that there more business establishments registered with the local government than with the BIR.
Although the BIR focuses its audit on big and medium businesses, subjecting smaller enterprises to investigation will yield considerable revenues for the government if income derived from them are merged with the taxes raised from the former, Endriga said.
The BIR has been reluctant in sharing its power with the local government, citing a provision in the Internal Revenue Code that bans it from sharing information with outsiders.
But Endriga cited a provision in Section 171 of the Local Government Code which states that "records of the revenue district office of the BIR shall be made available to local treasurers or their representatives."
"We are all under the Department of Finance and looking into the financial statements of business enterprises do not involve national security," he said.
It was learned that a memorandum of agreement between the BIR and the Bureau of Local Government Finance which call for the sharing of information between the BIR and local treasurers was signed in 1995 but has not been implemented until now.
Endriga said it is the desire of local governments to help the BIR collect taxes since they, too, will benefit from it in terms of increased Internal Revenue Allotment.
