Part of the efforts of the Bureau of Internal Revenue (BIR) to crack down on tax evaders is the weekly “name-and-shame” drive that uses newspaper ads listing those not paying proper taxes.
In a newspaper ad published in July last year, the Department of Finance, the BIR’s parent agency, said income tax returns showed that public school teachers were making more money than half of the doctors, lawyers and accountants in Makati City.
Of all the self-employed doctors, lawyers and accountants in the country’s financial district, 54 percent paid less than P35,000 in taxes in 2012, the ad said.
The amount was less than the P35,952 that the government collected every year from a public school teacher earning P21,500 a month.
The ad also said that there were 318 accountants who paid taxes in Makati in 2012, with the top taxpaying accountant shelling out P4 million while the one at the bottom of the list paid only P120.
The BIR believes that an average self-employed professional should be paying at least P100,000 in annual taxes.
Another measure aimed at curbing tax evasion is a regulation requiring hospitals and health maintenance organizations (HMOs) to withhold taxes from doctors and other medical practitioners, and remit them to the government.
Under Revenue Regulation No. 14-2103 released last September, the BIR said hospitals and HMOs should withhold a creditable withholding tax of
15 percent from the annual income earned by doctors or other medical practitioners who attended to their clients if the income exceeds P720,000. For lower amounts of income, the tax to be withheld is set at
The BIR also sought the assistance of the Professional Regulation Commission (PRC) in solving the long-standing issue of rampant tax evasion among self-employed lawyers, doctors, accountants and
In an interview with the Inquirer last July, Internal Revenue Commissioner Kim Henares said her agency was closely coordinating with the PRC on a measure requiring self-employed professionals to submit income tax returns when renewing their licenses.
Tax officials noted that tax evasion was most rampant in the professional sector.
Citing BIR data, Henares said that out of the estimated 1.7 million professionals registered with the PRC, only about 400,000 were registered with the BIR as taxpayers.—Inquirer Research
Sources: Inquirer Archives