Govt eyes more taxes from self-employed | The Manila Times

BY KATRINA MENNEN A. VALDEZ REPORTER

THE Aquino administration would zero in on collecting more taxes from self-employed individuals, including doctors, lawyers and businessmen as such taxpayers contribute a meager amount to the government?s coffers.

Finance Secretary Cesar Purisima on Tuesday told reporters that some 1.695 million self-employed individuals and professionals only paid an aggregate amount of P9.8 billion based on their income tax returns filed last April.

Purisima said that this would only translate to average tax payments of P5,800 in 2010 for these taxpayers, who essentially included some of the high-income earners in the country.

?It [tax payment] should be higher. It does not make sense when you compare it with the average payment of those who are employed. It?s not believable,? the Finance chief noted.

Individual taxpayers contributed a total of P170 billion to Internal Revenue?s tax collections in 2010, the bulk of which came from compensation income or taxes withheld by employers against their employees.

?We would be zeroing in on this sector [self-employed individuals]. We are encouraging them to come forward and go to the Bureau of Internal Revenue because they have the power to abate, and just pay for the deficiency tax, not the penalties,? Purisima said.

A World Bank study earlier estimated that using the current tax structure of the Philippines, the government could still collect taxes equivalent to about four percent of the country?s gross domestic product (GDP), or the total value of goods and services produced in a country in a year.

Purisima has said that the Bureau of Internal Revenue would also step up collection efforts on estate tax and value-added tax, or sales tax to recover taxes from the untaxed sector of the economy.

Internal Revenue has collected P915 million from estate taxes in 2009, and P1.34 billion in 2010.

?The idea is to increase estate tax collections,? Purisima said.

The Finance chief attributed revenue leakages to smuggling and tax evasion.

For 2011, the Bureau of Internal Revenue is ordered to raise P940 billion, while the Bureau of Customs? revenue goal is P320 billion.

Source: http://www.manilatimes.net/news/topstories/govt-eyes-more-taxes-from-self-employed/

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