MANILA, Philippines - The government will soon require self-employed professionals to present their income tax returns (ITRs) when renewing their licenses with the Professional Regulation Commission (PRC) to make sure they are paying the right taxes.
Professionals include teachers, doctors, accountants and engineers.
In an interview over ANC yesterday, Finance Secretary Cesar Purisima said he had reached an agreement with Labor Secretary Rosalinda Baldoz to implement the tack aimed at boosting revenues and deterring tax evaders.
Purisima said the government is working to raise the number of taxpayers to 1.8 million, and average tax payments to P200,000.
The targets, if realized, are expected to yield an additional P360 billion in revenues for the government.
Given a booming construction industry, the Department of Public Works and Highways is also requiring contractors to present their ITRs, which are now used as basis for granting of government contracts or projects.
“We are making sure the ITR is not just an ID but will also be a basis for renewal of licenses or granting of contracts,†Purisima pointed out.
Purisima stressed that professionals must be more diligent in paying their taxes.
In 2009, tax collections from self-employed, businesses, and professionals accounted for about eight percent of all individual income tax collections.
This share, however, is seen to shrink to 6.8 percent in 2012.
Tax compliance among self-employed individuals and professionals has been historically poor because of fraudulent business expense deductions, failure to file income tax returns, and inconsistent issuance of official receipts.
While the tax payments of self-employed individuals increased by P1 billion from 2010 to 2012, the sector only makes up 6.8 percent of total individual income taxes.
This is far below the 81.5 percent share of those whose taxes are automatically deducted from their salaries.
Based on data from the Bureau of Internal Revenue, there are 402,934 self-employed individuals who pay an average annual income tax of P33,441.
The finance chief also reminded taxpayers to file their tax returns on or before April 15.
He said the deadline would not be extended and that the usual interest and surcharges would be imposed on late-filers.
“I urge everyone to contribute to the work of building our country by paying the right taxes. Higher revenues will allow us to invest in more education programs, more health services, and more infrastructure, creating more jobs and more wealth for everyone. Everybody wins when everybody pays the right taxes,†Purisima said.