MANILA, Philippines - The government will target the country’s 1.7 million professionals like lawyers and doctors in its tax examination and revenue generation campaign next year, Finance Secretary Cesar Purisima said yesterday.
He told the House appropriations committee that the Bureau of Internal Revenue (BIR) would make professionals and self-employed individuals pay more income taxes.
“President Aquino was correct in saying in his SONA (State of the Nation Address) that professionals pay less taxes than ordinary workers,” he said.
In his SONA on July 25, the President lamented that the wang-wang (blaring siren) attitude “still exists in the private sector.”
“According to the BIR, we have around 1.7 million self-employed and professional taxpayers: lawyers, doctors, businessmen who paid a total of P9.8 billion in 2010. This means that each of them paid only an average of P5,783 in income tax. They each must have earned only P8,500 a month, which is below the minimum wage. I find this hard to believe,” he said.
“Today, we can see that our taxes are going where they should, and therefore there is no reason not to pay the proper taxes. I say to you: it’s not just the government but our fellow citizens who are cheated out of the benefit that these taxes would have provided,” he said.
Purisima said the BIR hopes to collect a minimum of P100,000 in income tax from professionals next year.
“If we are able to collect that amount, we will increase our revenues to at least P170 billion from this group of taxpayers, from less than P10 billion in 2010,” he said.
He said the P100,000 average income tax goal from professionals is even a conservative target.
He lamented that while professionals are the more affluent income earners, they account for only a small fraction of total revenues.
“The bulk of our revenues come from salaried workers,” he said.
Budget documents provided to the House appropriations committee show that last year, salaried workers contributed more than P100 billion in income taxes to the national coffers.
Purisima pointed out that the government has to boost revenue collections “to support increased spending for infrastructure and social services and at the same time reduce the budget deficit.”
Purisima revealed that his department is aiming to increase 2012 collections by 11 percent over this year’s target.
He said current legislative efforts to review tax rates and fiscal incentives would greatly help in generating more tax income.
In particular, he asked lawmakers to act speedily on the bill that seeks to rationalize fiscal incentives to scores of companies.
He said the bill would do away with “redundant” incentives.
Speaker Feliciano Belmonte Jr. is one of the authors of the measure.
P23B from tax cases
Meanwhile, the government hopes to rake in more than P23 billion from successful prosecution of tax cases, according to President Aquino.
In a video message for the Bureau of Internal Revenue in its 107th anniversary, Aquino told revenue officials and personnel of the “active role you have taken in our transformation agenda, as evidenced by, among others, your vigilant campaign against tax evasion.”
BIR Commissioner Kim Jacinto Henares said successfully prosecuting 57 tax evasion cases pending since last year would translate to P23.18 billion.
She said that while the Run Against Tax Evaders program is the most visible project of the bureau, it has a lot of other things on its plate, including its tax reform agenda.
Purisima said the challenge for the agency is to increase its tax effort by 18 percent.
Henares said the BIR hopes to achieve such target by the end of Aquino’s term in 2016.
“There’s a lot of things that have to be collected,” she said.
Purisima noted that by running after tax evaders, the bureau was able to raise its collections by 9.6 percent year-on-year in 2010.
“This year, the bureau also started on the right track by not only posting 14.29 percent growth in its January-April collections, it also surpassed its four-month goal of P302.16 billion by collecting P302.94 billion,” he said.
“Under the Aquino administration, BIR, through Commissioner Kim Jacinto-Henares, has strengthened its anti-corruption drive and eventually saw early fruits on its efforts to curb tax evasion practices and contribute to nation building,” Purisima said. With Reinir Padua