By mid-February, BURS was lagging behind its target with collections of about P42.5 billion due to what Finance Minister Peggy Serame, told Parliament was the underperformance of income tax and customs receipts from depressed mineral tax revenue and exchange rate losses.
On Tuesday, BURS Commissioner-General Jeanette Makgolo told journalists the authority had powered to its highest-ever annual collections figure thanks to vigorous strategies and initiatives.
“You will also agree with me that, during this period where macroeconomic conditions are not favourable to realise optimal revenue collection, particularly in the second and third quarter of the year where diamond sales plummeted, this collection is not a windfall, but the results of deliberate efforts and hard work of visionary men and women of BURS, and our key stakeholders,” she said.
Separately, Makgolo told BusinessWeek that the war room had intensified collections, particularly the Pay As You Earn (PAYE) tax where some businesses were found to have been withholding remittals due to the BURS.
“That is actually a crime and they are not supposed to be doing that,” she said in an interview. “We find that some employers collect PAYE and reinvest it into their businesses which is a serious crime. “They are not paying until we go to them and say ‘please we are very aware that you have employed this many people and this is what you have withheld’. “We are doing a lot to ensure no one avoids paying their PAYE. “Once you start (paying PAYE), when the following year you are not coming forth, we have to go back to you and say what happened? “You had so much staff and you used to remit so much. We expect you to go higher as inflation increases and salaries increase.”
Makgolo said the war room had dedicated itself to chasing up collections and debt arrears.
“The war room is looking at those things. “Every day they monitor the movements. “Fortunately for us, for this year, we have cleaned our debt book and we can know exactly who is owing us and then make follow-ups and do the targeted audits.”
Officials said the fourth quarter turnaround in collections was also helped by a rebound in diamond sales over the period, following the slump earlier in the financial year. Local diamond sales were heavily impacted by a midstream and retail downturn owing to oversupply in the market, stemming from global economic uncertainties and higher-than-average sales in 2022.
During the just-ended financial year, the BURS established a 'boots on the ground' operation across various regions, pushed for timely filing, as well as, follow up on outstanding PAYE and VAT returns, while also conducting targeted revenue-generating audits.
The authority also squeezed its customs collections through targeted post-clearance audits, recoveries from outstanding deferred accounts debts, combating undervaluation, mounting anti-smuggling roadblocks and other initiatives.
For the current year, the Finance ministry has tasked the BURS with collecting P70.6 billion, an increase of P11.4 billion or 19.2% on the 2023–2024 target. Makgolo said the authority would debut the track and trace technology for excisable goods, introduce a transit monitoring system to prevent diversion and local dumping of transit-declared goods and also adopt the electronic VAT billing system.
The track and trace system involves placing a biometric imprint on all alcohol and tobacco products as they are manufactured and/or imported into the country, allowing the BURS to check that the correct tax revenue is being paid and that the products are genuine and not illicit. The BURS in 2022 engaged Authentix, a Texas-based authentication firm, to provide the “fiscal marking and inventory solution,” under a 10-year contract.
“The track and trace system is expected to go live in July this year,” a BURS official told BusinessWeek on Tuesday.
