BIR sets sights on pawnshops
MANILA, Philippines - The Bureau of Internal Revenue (BIR) is zeroing in on pawnshops which have registered an uptick in sales from customers wanting to trade in their jewelries and heirlooms for quick cash.
The Department of Finance said while gross income of pawnshops inched up by 1.66 percent last year, tax collections from these pawnshops declined by 9.25 percent.
Government data show that of the 5,248 pawnshops that are registered in the BIR’s integrated tax system, only 5,003 paid taxes in 2011.
This means that one in every 20 BIR-registered pawnshops did not file returns last year, evading their tax obligations.
Discrepancies were also noted in the number of registered businesses as the number of pawnshops supervised by the Bangko Sentral ng Pilipinas as of end-2012 stood at 6,301 or 1,071 more than those registered with the BIR.
Aside from this, the Finance department also noted the decline in the average tax payment of pawnshops from P363,085 in 2011 to only P315,812 last year as some pawnshops were found to have paid unreasonably low taxes.
According to government data, St. Ernest Pawnshop located in Marikina paid the least, remitting a measy P26.10 to the BIR followed by Batangas- based Skyland Pawnshop with P72.38, and Mega GHQ in Taguig/Pateros with P166.85.
Elite Pawnshop located in West Pasig paid only P227.92 while Camarin Pawnshop in Caloocan City settled only P288.88.
In Lipa City in Batangas, the average tax collections from pawnshops amounted to P24,777.29, while those located in the progressive Paranaque City paid an average of P41,694.83.
In Cagayan de Oro, average tax payments reached P62,632.80.
The BIR has been releasing statistics about tax payments since last month as part of the Aquino administration’s nationwide crackdown against tax evasion.
The agency’s Name and Shame Campaign is aimed at encouraging more people to pay the right taxes, which in turn should boost state coffers and help the government achieve sustained inclusive growth.
Recognizing the importance of pawnshops in the country’s financial sector, the BSP has tightened its grip on these companies which may be used by unscrupulous entities to carry out their money-laundering activities.
The central bank recently required all pawnshops to strictly implement identification requirements for customers to help ensure that items being pawned are not stolen goods or illicit covers for money laundering.
Pawnshop customers need to show proper identification cards bearing their photograph. They must also provide relevant personal information such as their address, date and place of birth, nature of work, tax account number and existing pension fund and insurance information.
People who fail to qualify for loans from banks turn to pawnshops for their immediate cash needs. Getting cash is easy as the pawned item or the collateral is the main basis for granting the loan and without the need for background checks.