“It’s hard to collect correct taxes from lawyers, businessmen” – BIR

By Mortz C. Ortigoza

URDANETA CITY – A top honcho of the Bureau of Internal Revenue said that the tax agency finds hard to collect the right taxes not with doctors but with lawyers and businessmen.
The source, who is based here but who asked anonymity, said that they still search for the silver bullet how to collect the right taxes with lawyers, fish pond owners, and other businessmen in Pangasinan.
 “Kasi ang transaction is between the client and either of the doctor, lawyer or businessman.
In a TV interview in the past, Assistant Revenue District Office Charmaine C. dela Torre said that the BIR can easily trace the doctors’ income tax since their billing to the patient is reflected on the bills submitted to PhilHealth.
PhilHealth submits all the transaction of the doctors to the patient at the BIR.
 The source said that to make lawyers and businessmen pay the correct taxes, their client should ask for government official receipt every time he transacts business with them.
But another insider at the BIR doubts if the taxpayer can do that particularly to lawyers. “Paano gagawin ng client iyon. Pipilitin niya iyong abugado na magbigay ng recibo sa 50 thousand pesos na acceptance fee sa murder, e baka masisira ang good will niya sa abugado?” he posed”
 In the Self-Employed Personnel (SEP) category of taxpayers in the country only one fourth pays the correct taxes according to the BIR.
 But BIR Regional Director Arnel Guballa is optimistic that this problem can be resolved by the government. He said the BIR is looking now for a voluntary payment scheme where SEP’s capacity to earn is being looked at. “Iyong nagbabayad ng tama. Ang sinasabi ni Secretary Purisima, 1.8 million, tina-target lang nila diyan. Magbabayad ng P200 thousand average. P200 thousand multiplied by 1.8 million taxpayers equals P360 billion,” he said.
 Earlier, BIR Commissioner Kim Jacinto-Henares said that there were around 1.7 million SEPs in the country that paid a total of P9.8 billion in taxes in 2010, or an average of only P5, 764. She said in 2011 that professionals, based on their income levels, should each 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, the Bureau of Internal Revenue (BIR) should be collecting P100 billion in taxes annually from these professionals, she said.
 The discrepancies prompted Henares to issue in February 2011 Revenue Memorandum Order No. 3-2011 ordering lawyers, doctors, engineers and other taxpayers rendering professional services to be the first to be subjected to an audit to determine whether they paid the correct taxes in 2010.