BIR trains sights on Makati lawyers

By Zinnia Dela Peña, The Philippine Star

Posted at Apr 17 2014 08:12 AM | Updated as of Apr 17 2014 04:12 PM

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is now training its sights on lawyers who have not been paying the right taxes.

The move is part of the bureau’s name and shame campaign aimed at increasing tax compliance of professional and self-employed individuals.

In the government’s latest TaxWatch advertisement, the BIR noted that only a little more than half of Makati-based lawyers – only 451 of the total 840 – filed their income tax returns in 2012.

About 67 or 19.9 percent of the registered Makati lawyers declared income taxes amounting to less than P27,360 or the income tax of a public school teacher earning P18,549 a month.

Next to zero, the lowest declared income tax was P329, the BIR said.

A certain lawyer with a gross income of P1.327 million in 2012 declared only P2,975 in income tax due, way below the P27,360 income tax that is automatically withheld from a public school teacher’s monthly salary.

A public school teacher earns P222,588 annually, based on the BIR’s integrated tax system.

“When you don’t pay your taxes, you’re a burden to those who do,” the ad said.

The government estimates that some P400 billion is lost each year to tax evasion. The amount is equivalent to four percent of gross domestic product.

The BIR has ramped up its audit and monitoring capacity to compel professionals and self-employed individuals to pay their fair share.

Unfazed by criticisms, the BIR is vigorously pursuing its tax watch campaign, this time targeting professionals.

The government’s main tax collection agency earlier drew the ire of the medical care industry following the release of a series of ads portraying doctors as tax cheats.

One of the ads showed one doctor earning P1.07 million in income but only paying P7,424 in taxes as compared to more than P221,000 in annual taxes paid by a teacher.

While the agency’s name and shame campaign has boosted its tax collections, the BIR continues to miss its annual collection targets, although by a small percentage.

BIR commissioner Kim Henares, however, is confident that the agency would see a vast improvement in collections given its intensified campaign to run after tax evaders.

Tasked with collecting about two thirds of the government’s total revenues, the BIR aims to collect P1.46 trillion this year, P855.77 billion of which will come from taxes.

The BIR’s collections grew nearly 10 percent to P82.18 billion in March but these were still short of the P90.5-billion target it had set for the month.