BIR slams tax-dodging lawyers, doctors

MANILA, Philippines—The cash-strapped Philippine government announced Friday a campaign to chase tax-dodging lawyers, doctors, accountants and athletes, accusing them of cheating the country out of billions of pesos.

Fewer than a third of the 1.7 million self-employed business people and athletes paid taxes in 2010, the Department of Finance said.

“This ‘hard-to-tax’ group of taxpayers will be this year’s focus of the (Bureau of Internal Revenue, BIR),” it said in a statement, specifically naming lawyers, doctors, accountants and athletes.

“In fact, the bureau has started filing tax evasion charges against high-profile professionals and businessmen.”

The BIR did not single out anyone by name, but in February the bureau filed a criminal charge against Philippine boxing icon Manny Pacquiao, accusing him of obstructing government efforts to investigate his income streams.

The eight-time world champion and member of the House of Representatives, who is one of the world’s highest-earning athletes, denies the charge.

The department said it estimated businessmen and professionals cheated the government out of P82.5 billion ($1.95 billion) in tax revenues from 2008-2010.

Most did not file annual income tax returns and many failed to issue receipts to customers, making it difficult for the tax office to monitor their earnings.

Others made up bloated expenses to cut their tax liabilities, it said.

As a result salaried workers, who have part of their income automatically deducted and remitted to the government, collectively provide about 12.5 percent of the annual revenue collections, it said.

Businessmen and other high-earning professionals provided just two percent.

“This lopsided tax sharing between the two groups of taxpayers has been there for years,” it added.

The government collected P1.27 trillion in taxes last year, but spent P692 billion more than that, forcing it to borrow money and sell state assets.