Tycoons not on BIR list coming forward
Megaworld founder says he paid P60M in taxes in 2011By Daxim L. Lucas |Philippine Daily Inquirer
A day after it was reported that members of the Lopez family were excluded from the Bureau of Internal Revenue’s top 500 individual taxpayers’ list, a taipan has come forward to show that he, too, had paid a large amount of taxes to the government.
Both incidents mark what could be the beginning of a trend where the country’s wealthiest businessmen—once eager to stay below the taxman’s radar—are now eager to be seen as having contributed generously to the state’s coffers.
Like many of his wealthy peers, businessman Andrew Tan did not find his name on the Bureau of Internal Revenue’s (BIR) top 500 individual taxpayers’ list, but his tax payments were enough to catapult him over show-biz personality Kris Aquino, who is No. 1 on the roster.
Data from the tycoon’s office showed that the founder of the Megaworld Corp. real estate empire, who was one of the Filipino billionaires named by Forbes magazine, paid P60.1 million in taxes for all his sources of income for 2011.
Kris, the youngest sister of President Aquino, paid P49.8 million in taxes due, to a large degree, to her earnings from commercial product endorsements.
Tan was the third businessman who sent word to the Inquirer that he should have been on the BIR list of the country’s top taxpayers.
Sources within the Lopez group of companies on Tuesday pointed out that family patriarch Oscar Lopez and his brother Manuel had paid P37 million and P11 million in taxes, respectively, for 2011.
“In the last few hours, our office has been receiving inquiries about the taxes that our chairman and CEO … has paid to the BIR,” said Megaworld chief financial officer Francis Canuto in a letter to the Inquirer Wednesday, which came with documents showing Tan’s tax payments.
“There has been a lot of interest generated in the last few days about the payment of individual income taxes,” Canuto added. “This is a very positive development for the country because such an interest is creating awareness on our obligation as Filipino citizens to pay taxes and do our part in fueling economic growth.”
Tax on dividends
In 2011, Tan—who also chairs conglomerate Alliance Global Inc.—earned P518.1 million in cash dividends from his stock holdings. On this income, he paid P51.8 million in taxes, representing a 10-percent final withholding tax that is, in practice, excluded from one’s income tax return filing.
During the period, Tan also earned P22.2 million in salaries from the companies he owns and worked in, for which he paid P7 million in income taxes—an effective tax rate of 31.5 percent.
Finally, the tycoon earned P3.8 million in director’s and consultant’s fees, resulting in additional tax payments of P1.2 million.
His total income for 2011 from all three sources amounted to P544.2 million, compared with his combined tax levies of P60.1 million for the period.
Revenue Commissioner Kim Henares explained why certain people were not on the list of top taxpayers.
“Only those who filed income tax returns (ITRs) will find themselves on the top 500 list,” the BIR chief said on Tuesday.
“If you did not file an ITR—if you had a ‘substituted filing’ where your company withheld income taxes for you and remitted it straight to the BIR, just like regular employees—it doesn’t matter how big your salary and tax payments are. You will not appear on the list,” she added.
The annual list of billionaires released by Forbes magazine shows that Tan is the Philippines’ fourth-richest man for 2012, with an estimated asset base of $3.95 billion.
“Dr. Tan is very supportive of the continuous efforts of the BIR in putting good governance in place,” Canuto said. “He also believes that through the leadership of Revenue Commissioner Henares, tax collections will improve, and taxpayer compliance and satisfaction will increase.”