THE red tape regulator said local government units (LGUs) are issuing high tax assessments to open up opportunities for corruption, and urged them to stay within the Department of Finance’s (DoF) assessment guidelines.
The head of the Anti-Red Tape Authority (ARTA) told reporters of the irregularities after the regulator conducted surprise LGU inspections in Metro Manila and Antipolo City last month.
ARTA Director General Jeremiah B. Belgica in a mobile message Sunday said among the findings are complaints that LGUS have not been complying with the DoF’s procedures in proving gross sales or receipts.
Assessing high taxes “becomes an opening for corruption to fester,” he said.
DoF assessment guidelines, he said, should be followed to avoid “whimsical, disproportionate, and unnecessary imposition of fees or taxes upon taxpayers.”
The guidelines are contained in the Bureau of Local Government Finance’s memorandum circular Updated Reminders in the Assessment of the Local Business Tax, Registration and Renewal of Business Permits and Licenses.
ARTA said that LGUs can use the Presumptive Income Level Assessment Approach, a method used to estimate taxes based on industry indicators, only if a published local ordinance allows for it.
“This may be resorted to by LGUs in computing for the local business taxes but only if the taxpayer is unable to provide proof of its gross sales or receipts,” Mr. Belgica said.
The agency urged LGUs to repeal Public Liability Insurance requirements in issuing business permits, noting that the insurance cover is optional.
“Unnecessary and burdensome requirements open an opportunity for corruption where it becomes a money-making business for government officers in connivance with some private players.”
ARTA plans to formally meet with the DoF and LGUs for discussions, adding that government units violating the Ease of Doing Business law and other rules could be investigated. — Jenina P. Ibañez
