ECONOMIC managers now want to go after the bank accounts of tax evaders, who they blamed for the government’s low tax revenue collections.
During Wednesday’s hearing of the Senate committee on finance on the proposed 2016 national budget, Finance Secretary Cesar Purisima lamented that tax evasion remains a “pervasive issue in the upper tier personal income taxes.”
“For example, almost 90 percent of all personal income taxes come from the fixed income earners such as the staff of Senator Angara; whereas our friends – the professionals, the self-employed, they average less than a minimum wage earner in tax payments,” Purisima said, responding to Senator Sonny Angara’s queries.
“How come they’re bold in their approach to taxation? How come they’re not scared of being caught? We have certain restrictions – that’s almost unique already,” he said.
Purisima then pointed to the existing Bank Secrecy Law, which he said should be lifted for suspected tax evaders only.
“When it comes to tax evasion, the Philippines is only one of three countries in the world left that has this provision, we’re in the company of Lebanon and Switzerland. That is why the upper tax portion – they are not paying the right amount,” he said.
The finance chief also pointed out that at present, the Philippines and Lebanon were the only two countries where tax evasion was not a predicate crime in the Anti-Money Laundering Act (AMLA).
Tax evaders, he said, would be emboldened if they would be allowed to continue to hide behind the laws.
Purisima noted that out of the estimated 1.8 million self-employed individuals, only about 400,000 file their income tax returns. He said the government raised about P12 billion from an average P33,000 tax payments of the said self-employed individuals.
“P33,000 is like the tax of someone in the minimum wage bracket,” he said.
“If we succeed in increasing that to an average of P200, 000 and increase the number of those complying from 400,000 to what we believe is close to 1.5 million, that alone will be equivalent to P300 billion,” he further said.
Purisima was quick to say, however, that he has nothing against doctors, lawyers, engineers, designers, actors, actress , basketball players, or entrepreneurs, who would be affected by the measures they are proposing in Congress to improve tax collections.
But Angara raised concerned that opening the bank accounts of suspected tax evaders would expose them to kidnappers .
“I think we need to reassure the public also because once you start touching things like bank secrecy, yung Chinese community matatakot sa kidnapping. What are the things that we can put in place to reassure the public..?” he asked.
Responding to Angara, Henares said: “I think you can go to all the history of kidnapping, hold-upping. It never was a result of information from the BIR (Bureau of Internal Revenue).”
For his part, Purisima assured the committee and Congress that they will work with multilateral agency “so that we can get the data on the correlation of the lifting of the bank secrecy with the increases of kidnapping.”