BIR eyes P1.64 T revenues by 2015

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is seeking to boost tax revenues to at least P1.64 trillion by 2015 or double the P822.62 million collected three years ago as it steps up efforts to run after tax cheats.

During the agency’s 109th anniversary celebration Friday, BIR commissioner Kim Jacinto-Henares said they would be working doubly hard to achieve their financial goals and bring non-taxpayers into the tax net.

The government wants to increase the ratio of tax collections to GDP (gross domestic product) to 16 percent by the end of President Aquino’s term in 2016.

Tax effort is an index measure of how well a country is doing in terms of tax collection relative to what could be reasonably expected given its economic potential.

For this year the government expects to shore up its tax effort to 13.5 percent from 12.8 percent in 2012.  Revenue effort, on the other hand, is targeted at 14.7 percent.

To widen the tax base, Henares said the BIR would continue to track down tax evaders with particular focus on professionals (doctors, accountants, lawyers) and self-employed businessmen.

Henares said the BIR is tightening its audit of the self-employed sector as part of efforts to plug revenue leaks and encourage more people to pay the correct taxes.

Finance Secretary Cesar Purisima said tax evasion among professionals and self-employed individuals remains rampant, noting that salaried employees continue to bear the brunt of higher taxes.

Compensation income earners are increasingly paying a larger share of income taxes than self-employed individuals and professionals. 

BIR data showed that there were 1.82 milion professionals registered with the main tax agency but only 402,934 of them paid taxes.

The Professional Regulation Commission and and the Social Security System both counted two million self-employed and professionals while the Department of Trade and Industry listed 2.1 million.  The National Statistics Office, on the other hand, counted 2.9 million.

Purisima, however, lauded the BIR for the dramatic growth in tax collections in the past three years.  Last year,the BIR collected P12.95 billion in taxes, higher than the 2011 figure of P10.19 billion and its collection goal for the year of P12.12 billion.

The financial chief said that while the country’s fiscal position has improved significantly, there is still much work to be done in boosting revenue collections, particularly taxes from professionals and the self-employed.

Based on BIR data, collections from self-employed individuals and professionals accounted for only 6.8 percent of individual income taxes in 2012.

The Finance Department and BIR aim to increase average tax payments to P200,000, which  will translate to a two percent increase in the country’s ratio of tax to gross domestic product by 2016.

For this year, the BIR is eyeing a 16.4-percent growth in its individual income tax collection to P258.14 billion from last year’s P221.77 billion as it continues to step up its drive against tax evaders.

Individual income taxes account for over a fifth of the BIR’s tax collection. The bulk of government’s individual income tax collection comes from salaried individuals whose taxes are automatically withheld by employers.

Henares reported that the BIR filed before the Departemnt of Justice a total of 57 tax evasion cases in line with its Run After Tax Evaders program.

The program was initiated by the BIR to investigate and prsecute idnividuals and/or entities engaged in tax evasion and other criminal violations of the National Internal Revenue Code.