Filipino-Chinese vow to toe line on taxes

A day after being chided by a “shocked” President Benigno Aquino III about the incredibly low taxes—or sometimes none at all—that affluent Filipino-Chinese businessmen were paying, the leaders of the community said they would toe the line and vowed to get their members to pay the right amount in taxes.

As this developed, the Bureau of Internal Revenue (BIR) said the businessmen only had until April 15 to pay the correct amount in taxes, after which the authorities would declare “open season” on tax delinquents.

“In light of the good governance program led by our President, the federation will ask the entire Chinese community to be very diligent in paying their tax obligations,” said businessman Francis Chua, relaying a message to the INQUIRER from Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. (FFCCCII) president Tan Chin.

President Aquino’s admonition to tax-evading Filipino-Chinese businessmen was made on Friday evening at the annual meeting of the FFCCCII in Pasay City, eliciting strained laughter, awkward reactions and knowing glances from the group’s members who were present, according to people at the event.

Chua, himself a past president of the FFCCCII, said the group—the umbrella organization of all Chinese-Filipino business associations nationwide—had been conducting regular tax seminars for its members to improve their tax compliance.

“We fully support our President in this tax campaign,” Chua said, while adding that many FFCCCII members were nonstock, nonprofit organizations that, by the nature of their activities, were usually engaged in activities that required little or no tax payments.

In his speech, President Aquino expressed shock upon learning earlier from the BIR that only 105 of the FFCCCII’s 207 member firms and organizations had tax identification numbers (TINs).

Despite 6.6 growth

“I wonder what happened to the others,” the President said. “Of these 105 firms, only 54 filed tax returns. To make matters worse, 38 firms and organizations actually filed returns with zero tax due. That means that only 16 of the 207—or only around eight percent—of your member organizations paid taxes. The 6.6 [percent economic] growth rate did not seem to affect your members.”

The President was alluding to the unprecedented growth rate achieved by the country last year.

“Of the FFCCCII’s 552 individual members, only 424 of you have TINs. Of that number, only 185 filed income tax returns, Aquino noted.

File taxes before deadline

“Of those that filed tax returns, only 14 filed returns with zero tax due,” he said. “What this means is 354 out of 552 members—or 64 percent of you—did not pay taxes for the same reasons: No TIN, no tax due or nothing filed at all.”

“In fact, of those who filed and paid income tax, many paid less than P100,000,” an incredulous Aquino said. “There were some who paid less than P1,000 in taxes,” he added.

Interviewed by the INQUIRER, BIR Commissioner Kim Jacinto-Henares said she was urging members of the business community to file the proper tax returns before the deadline next month.

“The President’s speech was an appeal to them,” Henares said. “The message basically was: We recognize that you’ve been helping the country and contributing to charitable work, but can you please pay the right taxes by April 15?”

Henares said the tax bureau was indeed looking into possible cases of tax evasion among local businessmen, but stressed that there was “no witch hunt” among specific ethnic groups.

She declined to reveal the identities of the persons or businesses being investigated or the amount in taxes they owed, saying the information was confidential.

Not a racial thing

“This is not a racial thing,” she said. “We are not targeting the Chinese-Filipino community. You’re a citizen of this country, you must pay the right amount of tax.”

The BIR chief explained that her agency was looking at data collected from all over the country in trying to detect patterns of potential tax evasion concentrated in specific groups and areas.

“We’re not targeting or threatening them. This is not because they’re the FFCCCI,” she said. “We’re looking at our database and this is what we see.”

The revenue chief also said that businessmen who underdeclared their tax liabilities in previous years must rush to file amended tax declarations before they are found out by the BIR’s examiners.

“About the past years’ liabilities, while we’re not investigating them, they can go back and amend their tax declarations,” Henares said. “They should report the right thing now. Then they can still go back to previous years to correct their returns.”

“Otherwise, they are taking a big risk. It will be the point of no return,” she warned. “Unahan na lang tayo niyan (Let’s see who gets to the other first).”