Gov’t tightens tax auditing of professionals, self-employed

MANILA, Philippines - The government is tightening the auditing of income tax returns of professionals and self-employed individuals.

Secretary Cesar Purisima said the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) are coordinating with the Professional Regulation Commission (PRC) and professional associations to compare the list of professionals in their database to boost tax compliance among the self-employed.

The government aims to shore up the tax effort from the current 12.8 percent to 16 percent at the end of President Aquino’s term in 2016, he added.

The government is boosting the gathering of information to expand the taxpayers’ base of professionals to 1.8 million and the annual average payments to P200,000, Purisima said.

The PRC said 2.046 million active professionals were registered last year: 149,981 were certified public accountants, 126,204 civil engineers, 124,409 doctors, 51,639 dentists and 30,712 architects.

Records from the Social Security Service showed 687,011 active paying self-employed members in 2011. The BIR reported around 1.8 million registered self-employed, businesses and professionals for the same year as against the 2 million registered with the PRC alone.

In 2011, a 1.4 million gap was recorded between actual filers and registered self-employed, business and professionals in the BIR.

Purisima renewed calls for taxpayers to pay the right taxes and support the government’s tax campaign.

“We urge our country’s professional associations to support our tax campaign,” he said. “Everyone will benefit from paying the right taxes when government and private sector work together.” 

Purisima said the finance department has sent the first batch of letters to the Philippine Institute of Certified Public Accountants, Philippine Institute of Civil Engineers, Philippine Dental Association, United Architects of the Philippines, Philippine Medical Association, and the Social Security System.