Lifestyle check on self-employed set

THE Aquino administration plans to conduct lifestyle checks on doctors, lawyers and other self-employed individuals to ensure they pay their taxes.

Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares said the agency has no other way of ascertaining correct tax payments of this group, thus its resort to lifestyle checks.

“We don’t have control as to really how much they are charging their patients, clients and customers,” Jacinto-Henares said.

“We can only bank on their honesty. But in an effort to really determine their respective tax dues, we will look at their respective lifestyles,” she said.

The BIR chief said they would conduct the lifestyle check by way of investigating the properties acquired by these self-employed individuals, and the properties’ corresponding values.

“That was how we found out about the Villarica case,” Jacinto-Henares said, referring to the first tax evasion complaint the Aquino administration filed against pawnshop owner William Villarica. The basis for the complaint was Villarica’s acquisition of luxury vehicles, one of which is a Lamborghini worth P26 million.

Villarica allegedly paid P25,607 in taxes from 2002 to 2009 after his pawnshop had folded up.

His alleged tax deficiency stood at P22.5 million, with the case still pending before the Department of Justice.

The BIR said there is a presumption that the Lamborghini’s value amounts to Villarica’s total earnings, which was be the basis of the tax evasion case.

“Then that’s how we would go about it, conduct lifestyle check and know if their income declared [is] commensurate with their respective lifestyles,” Jacinto-Henares said.

Data from the BIR revealed that self-employed individuals contributed only about P7 billion to government coffers last year.

For this year, the BIR is tasked to raise P920 billion to support the national government’s budgetary requirement of P1.645 trillion. –KATRINA MENNEN A. VALDEZ REPORTER, Manila Times