Get a bank loan and pay your taxes, docs, lawyers told
Bureau of Internal Revenue Commissioner Kim Jacinto-Henares. FILE PHOTO
MANILA, Philippines—Get a bank loan and use the money to pay your accumulated tax obligations.
This is the advice of the Bureau of Internal Revenue (BIR) to doctors, lawyers and other self-employed professionals who have been tax delinquent for years.
“If they want to come clean by settling all their unpaid taxes, I suggest they obtain a bank loan and use the proceeds to pay their tax obligations. They can save money by doing so,” BIR Commissioner Kim Henares told the Inquirer.
Henares said tax delinquents were better off settling their unpaid obligations now rather than later when cases would have been filed against them.
Deferring payment of accumulated liabilities, she said, would just further bloat the tax obligations because of penalties imposed by the BIR.
Under the Tax Code, the BIR imposes a 20-percent annual interest rate on unpaid tax liabilities as penalty.
The average bank lending rate stood at 5.62 percent in July, latest data from the central bank showed.
Rampant
Henares said the BIR was not offering an amnesty program for tax delinquents. So, the delinquents ought to pay all their unpaid taxes in full.
Efforts to crack down on tax-delinquent self-employed professionals come amid studies showing their sector is one of those where tax evasion is most rampant.
Based on estimates by the World Bank, the Philippine government loses about P450 billion in potential revenue collection due to tax evasion.
The BIR on Tuesday posted a new revenue regulation requiring hospitals, clinics, health maintenance organizations and similar institutions to withhold taxes of doctors and other medical practitioners, and remit these to the tax bureau.
Revenue Regulation 14-2013 is meant to address the failure of a number of doctors and other medical practitioners to remit taxes on their own.
Under the regulation, hospitals, clinics, HMOs and similar institutions should withhold taxes equivalent to 10 percent of the annual incomes of medical practitioners if incomes are P720,000 and below. For higher incomes, the tax rate is set at 15 percent.
The BIR is the biggest income earner for the government, accounting for about 60 percent of the state’s total revenues.
For this year, the BIR is tasked with collecting P1.253 trillion in taxes to help ensure the government keep its budget deficit at or below the ceiling of P238 billion.
The BIR’s target for this year is 18 percent more than its actual collection last year.
