BIR to conduct lifestyle checks on professionals

By VG Cabuag, Business Mirror
Posted at 08/01/2011 8:48 AM | Updated as of 08/01/2011 8:48 AM

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is set to conduct lifestyle checks on professionals – including doctors, lawyers and accountants – in a move to convince self-employed people to pay their proper taxes to the government.  Internal Revenue Commissioner Kim Jacinto-Henares said in a wide-ranging discussion on Friday with editors, columnists and reporters of the BusinessMirror, the Philippines Graphic and radio station dwIZ, that the agency would release to the public “by sector” the names of the country’s highest-paid professionals.
She did not say how the lifestyle check would be conducted, but hinted that it would be similar to the lifestyle checks on government officials.

Henares revealed that during her meeting with the Professional Regulation Commission, she learned there were about 3 million professionals in the country; the BIR’s database only shows around 195,000 of them are paying their taxes.

“Of course, from the 3 million professionals you will deduct the nurses and the seafarers because they are not considered self-employed anymore.” Still, she said the data reveal that the difference between the number of taxpaying and nontax-paying professionals is huge.

“We are asking people to insist that they be issued a receipt by all these professionals,” she said.

According to BIR data, the total income tax remitted last year was around P170 billion. Of this figure, only P9.83 billion came from self-employed individuals; the rest was from those employed whose companies automatically deduct their taxes from their salaries (withholding taxes).

Based on the income-tax returns filed in April, the P9.83 billion was paid by 1.69 million people who declared
themselves self-employed; they included those who run their own businesses. Professionals are included in the self-
employed category.

Finance Secretary Cesar Purisima said the tax remittance was “too small”; each of them paid only an average of
P5,800 in income taxes. Computed, this meant they declared earning only less than P20,000 the year before.

“I think they [income tax payments] should be higher. It does not make sense when you compare them with the
average payment of those who are employed. It’s not believable,” Purisima said earlier.

“We would be zeroing in on this sector [self-employed]. We are encouraging them to come forward and go to the
[BIR], and pay the deficiency tax to avoid penalties,” he said.

The BIR has said it would go after the P23.38 billion in additional revenues from the 57 tax cases it has filed under
the Run-After-Tax-Evaders program of the Aquino administration. Of these cases, six have been filed with the Court
of Tax Appeals, including that of Mariano Lim Gaw Jr., the current biggest tax-evasion case.

The BIR is seeking to collect at least P5.5 billion from Gaw for underdeclaring his income in 2007 and 2008, and
for failing to remit value-added tax returns to the government in 2008. The case against Gaw was filed with the
Department of Justice (DOJ) on August 26, 2010; the DOJ ruled there was probable cause.

Gaw, who owns Mega Packaging Corp., allegedly bought 10 parcels of land in 2007 and 2008 for P4.11 billion and
sold them for P8.41 billion within a year.

Twenty-five of the 57 cases are up for resolution at the DOJ and 12 are still under preliminary investigation.

BIR orders building owners to ensure tenants are registered tax payers

OWNERS of commercial establishments will now be required to ensure that their tenants are registered taxpayers, according to the latest issuance of the Bureau of Internal Revenue (BIR).  The BIR has begun its drive to track the untaxed sector with Revenue Regulations No. 12-2011, issued on July 25.

The latest tax regulation sets the reportorial requirements for establishments leasing commercial spaces.  “It shall be the primary responsibility of all owners or sub-lessors of commercial establishments/ buildings/spaces to ensure that the person intending to lease their commercial space is a BIR- registered taxpayer,” the issuance stated.  Their tenants must have a tax identification number (TIN), a BIR Certificate of Registration and duly registered receipts, it added.

These requirements ensure that those engaged in retail remit value-added taxes and income taxes to the government.  Under the new issuance, building owners will now be required to submit, under oath, a tax registration profile of their lessees to the BIR twice a year.(BIR)

Malacañang urges Filipino citizenry to pay correct taxes

MALACANANG urged the people to support the intensified drive of the Bureau of Internal Revenue (BIR) to generate more government funds that will be used for developmental projects and eventually bring real progress and development to the country.

Executive Secretary Paquito Ochoa, Jr. encouraged the Filipino citizenry, especially those in the professional sector, to declare their actual annual income and pay their taxes properly as enunciated by President Benigno S. Aquino III in his State of the Nation Address during the Joint Session of the 15th Congress at the Batasan Pambansa Complex in Quezon City on Monday.

The Executive Secretary stressed the importance of the people’s trust in government as he assured that the funds collected by the government’s revenue collection agency will directly go into the national treasury.  According to the BIR, 1.7 million self-employed and professional taxpayers comprised of lawyers, doctors and businessmen, among other, paid a total of 9.8 billion pesos in 2010.
The data indicates that each of them paid only an average of 5,783 pesos in income taxes – if proven true – each must have earned only 8,500 pesos per month, which is below the existing minimum wage in the country.

The President also spelled out the concrete projects of his administration using public funds collected by the BIR.  According to the President, cheating in the payment of taxes not only affects the government funds collection but also the Filipino people who could have enjoyed from the benefits these taxes would have provided. (PCOO)

BIR to conduct “lifestyle check” on officials linked to jueteng

THE Bureau of Internal Revenue (BIR) will conduct a “lifestyle check” on officials linked to jueteng after two whistleblowers released the names of government officials allegedly involved in the illegal numbers game.

At a news briefing, BIR commissioner Kim Jacinto-Henares said the investigation will begin with the list of names disclosed at the Senate this week.

Retired Lingayen-Dagupan Archbishop Oscar Cruz testified at a Senate hearing this week about government officials allegedly involved in jueteng.

Senator Miriam Defensor-Santiago on the other hand, gave a privilege speech on Wednesday, naming persons allegedly involved in jueteng operations nationwide.

Henares said a lifestyle check could uncover information on whether the alleged government officials involved in jueteng are paying the proper taxes and where their money is coming from.

Department of Justice Secretary Leila de Lima, who was present during the briefing, said she will also check whether there are high-profile jueteng cases pending before the department. (PIA)

Aquino government files first tax evasion case

THE Aquino government filed its first tax evasion case on Thursday to launch its campaign to shore up shaky revenues and cut the budget deficit by cracking down on corruption and enforcing tax collection laws.

Finance officials went to the justice department to file tax evasion charges against pawnshop owner William Villarica, who they said paid only P25,600 in income tax between 1998 and 2009, but was able to buy a P26 million Lamborghini sports car.

“We would like to inform the paying public that it’s no longer business as usual and chances of being caught is higher,” Finance Secretary Cesar Purisima told reporters.

Newly installed Bureau of Internal Revenue chief Kim Henares said that the tax agency has been investigating Villarica since 2007, but was only able to file a criminal case against him now.

In the meantime, Justice Secretary Leila de Lima said she was reviewing tax cases referred by the finance department, pointing to a list that had names of 16 individuals and corporations.

The Philippines had a tax collection rate of 12.8% of its gross domestic product (GDP), lower than the regional average of 16 %, the finance minister said. (PIA-Bohol)