BIR Commissioner Kim Henares. INQUIRER FILE PHOTO
MANILA, Philippines — The Bureau of Internal Revenue is set to issue a directive for doctors, lawyers and other professionals to post visibly in their clinics and offices the rates they charge to customers.
The directive is aimed at promoting transparency and discouraging tax evasion among self-employed professionals, a sector where tax evasion is believed to be rampant.
The disclosure of rates charged by professionals is expected to aid in tax audits conducted by BIR personnel.
BIR Commissioner Kim Henares said the BIR has started drafting the revenue memorandum circular (RMC) requiring the posting of rates and would release the circular soon.
“We will be issuing the RMC soon. This is part of the overall effort to curb tax evasion,” Henares told reporters.
The BIR is zeroing in on professionals, among several other sectors, as it aims to boost revenue collection. Henares cited the serious need to implement stricter measures against tax evasion because lost potential revenues from the illegal activity have been deemed significant.
She said that out of the estimated 1.7 million professionals registered with the Professional Regulation Commission (PRC), only about 400,000 have registered as taxpayers with the BIR.
Moreover, those who are registered with the BIR are believed to be significantly under-declaring their incomes.
The BIR earlier released a report showing that the average annual tax payment by self-employed professionals stood at less than P6,000 each. The tax bureau believes an average self-employed professional should be paying at least P100,000 in annual taxes.
Henares said the BIR has asked PRC to help in the anti-tax evasion drive. In particular, PRC is asked to require the submission of income tax returns for renewal of professional licenses.
She said PRC would soon include ITRs in the list of its requirements.
Efforts to curb tax evasion come amid the BIR’s assignment of collecting P1.253 trillion in taxes this year to help the government afford its rising expenditure requirements.
The BIR’s tax collection target for the year is higher by 18 percent than the P1.06 trillion it collected in 2012.
Its collection goal for the year is meant to help the government keep its budget deficit at or below the ceiling of P238 billion.
The BIR accounts for nearly 70 percent of the national government’s revenue collection.