MANILA, Philippines - The House of Representatives ways and means committee yesterday approved a proposal to authorize the Bureau of Internal Revenue (BIR) to collect in advance for the next two years large firms’ income tax.

Joint Resolution (JR) 50, authored by Quezon Rep. Danilo E. Suarez (3rd district), noted that income tax collected last year from large taxpayers like oil, pharmaceutical, telecommunication, alcohol and tobacco firms amounted to P11.491 billion, computed from total gross sales/receipts of P676.88 billion.

The resolution said this effort is expected to collect P100 billion. Proceeds will be used to fund rehabilitation of areas in Metro Manila and other parts of Luzon damaged by storms Ondoy and Pepeng that struck from end-September to the first week of October.

While the National Disaster Coordinating Council estimated damage from those storms to have reached P38 billion, an assessment conducted by the World Bank pegged the cost at some $4.38 billion, or about P206 billion.

Committee chairman Rep. Exequiel B. Javier of Antique stressed the need for an incentive since such advanced tax payment would be voluntary. "We ought to make this proposal attractive for them…give them something they can get in return for helping the government," he said in a phone interview yesterday.

Lourdes B. Recente, Finance department director for research, said Finance Secretary Margarito B. Teves has proposed to give a 6% discount to companies that will participate. "We are proposing…a form of early bird discount. We have made our intention [sic] that this provision be inserted into the joint resolution and we got an affirmative response. The committee will restructure the joint resolution and have this [provision] incorporated before it submits the proposal to the plenary," Ms. Recente said via phone. -- JFSV