WHAT WENT BEFORE: taxes paid in 2010
There are an estimated 1.7 million professionals in the country, but they paid only P9.8 billion in taxes in 2010, Revenue Commissioner Kim Jacinto-Henares said in July, citing the latest data from the Bureau of Internal Revenue (BIR).
Judging from this amount, each working Filipino professional paid an average of only P5,764 in taxes last year, Henares told the Inquirer in an interview.
She estimated that, based on their income levels, each professional should be paying P100,000 in taxes on the average, indicating a 90-percent tax evasion rate among doctors, lawyers, accountants, engineers, architects and entertainers, among others.
“Ideally, we should be collecting about P100 billion in taxes annually from these professionals,” she said.
In August 2010, Finance Secretary Cesar Purisima said self-employed persons and professionals—including lawyers and doctors—accounted for just 5 percent of the P136-billion tax collections on net income and profit.
He said 82 percent of this tax take was accounted for by fixed wage and salary earners, making tax collections on net income and profit “unequally shared by taxes on fixed wages vis-à-vis taxes on self-employed and professionals.”
Purisima said professionals paid only P68,000 on the average. (This is considering the total collections from self-employed individuals amounting to P7 billion, and the total number of active tax identification numbers attributed to those engaged in the exercise of a profession.)
In February, Henares ordered that lawyers, doctors, engineers and other taxpayers rendering professional services would be the first to be subjected to an audit to determine whether they paid the correct taxes in 2010.
Her Revenue Memorandum Order No. 3-2011 states that the initiative is meant to enhance taxpayers’ voluntary compliance by encouraging payment of the proper amount of taxes.
Henares also said in July that the BIR would soon embark on a “name and shame” drive to get the Philippines’ highest paying and perennially “undertaxed” professionals to pay the correct taxes.
Under the scheme, the BIR will publish lists ranking the tax payments of professionals on a per-industry basis, with special attention to those who pay the highest taxes in their industries as well as those who pay the lowest.
Henares stressed, however, that the BIR would not make the taxpayers’ names public, but would instead use the information on the amount of taxes they paid as a benchmark for the other members in their industries. Inquirer Research
