MANILA, Philippines - The Aquino administration hopes to increase estate tax collections to roughly P10 billion a year from around P1 billion in recent years, Finance Secretary Cesar Purisima said.
Purisima urged employees of the Bureau of Internal Revenue (BIR) to raise more from estate taxes and hit the P10-billion level by the end of the Aquino administration in 2016.
“Estate tax collections have remained stagnant through the years. There are many areas for improvement. Maybe we can multiply (estate tax) collections by 10. Now, it’s hovering around P1 billion,” Purisima said in a speech during the 108th anniversary celebration of the Bureau of Internal Revenue (BIR) on Wednesday.
At present, heirs of deceased persons need to pay a tax equivalent to 20 percent of the estate of the deceased.
Some individuals try to escape this provision by withdrawing the accounts of the deceased persons without declaring to the banks the incident of death.
BIR deputy commissioner Estela Sales said that in some cases, the tax agency encounters difficulty in collecting estate taxes because some of the heirs claim that they do not have enough cash to settle their tax dues.
Purisima believes that estate tax collections could significantly increase because in some cases the amount goes as high as P3 billion for only one person.
While the Finance chief congratulated BIR employees and commissioner Kim Henares for the improvement in revenue collections, Purisima said there are still many critical areas that need to be addressed.
He said another potential source of higher revenues is the self-employed sector.
Based on the BIR’s estimates, the average tax being paid by self-employed individuals is only at P5,500 per individual even as this should increase to roughly P100,000 to P200,000.
The BIR collected P81.34 billion in taxes in June, surpassing the P75.4-billion target set for the month by 7.88 percent, latest data from the agency showed.
The June 2012 collections also exceeded year-ago figures by P14.44 billion or 21.58 percent, the BIR said.
The latest tax-take brought the BIR’s January to June revenues to P521.16 billion, higher by P63.16 billion or 13.79 percent compared to the collections in the same period last year, data from the bureau also showed.