Govt’s next target: Inheritance taxes, doctors, lawyers

Published by rudy Date posted on August 20, 2010

THE government hopes to recover an estimated P250 billion lost yearly to tax evasion by focusing on tax cheats among the self-employed and collecting unpaid inheritance taxes, Finance Secretary Cesar Purisima said Thursday.

The Aquino administration is striving to raise revenue to reduce its budget deficit without imposing new taxes. It aims to maintain for 2010 last year’s budget deficit of 3.9 percent of gross domestic product and to pare it down to 2 percent by 2013.

The losses due to tax evasion is equal to 77 percent of the anticipated P325 billion budget deficit to be incurred this year.

Purisima said 82 percent of the P136 billion in personal income taxes collected in 2009 came from fixed income earners, while only 17 percent came the self-employed.

Self-employed people include businessmen, doctors, vendors and taxi drivers.

There are an estimated 1.4 million registered self-employed Filipinos, and Purisima said if self-employed individuals could be convinced to increase their tax payment by P100,000 each, that would translate to P140 billion in extra collections.

Officials have been filing tax-evasion charges against allegedly erring businessmen, and Purisima said he hoped to see convictions to show that the government meant business.

Estate tax collection in the country was also pitiful at less than a P1 billion a year, he said.

“If we succeed in breaking all these layers of protection that lawyers designed to avoid estate taxes, then I’m sure that just with one estate tax case, that number can more than double,” he said, urging the banking system not to connive with tax evaders.

The Aquino administration has said it first wants to fix tax leaks before implementing new taxes. Purisima said he would support a review and restructuring of the so-called sin taxes on cigarettes and liquor, but the government was “not in a position to propose that over the next 12 months.” AP

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