Lawyers, doctors, businessmen paid only P5,800 in income tax

SELF-EMPLOYED people including doctors, lawyers and businessmen paid an average tax of only P5,800 last year, Finance Secretary Cesar Purisima said Tuesday.

Purisima, citing data from the Bureau of Internal Revenue, said some 1.69 million self-employed people and professionals paid only P9.8 billion last year.

That meant an average tax payment of P5,800 each for this sector, which included some of the highest net worth individuals in the country, Purisima said.

“It should be higher,” he said.

“It does not make sense when you compare it with the average payment of those who are employed. It’s not believable.”

Individual taxpayers contributed 170 billion to Internal Revenue’s collections last year, and of that the bulk came from the compensation income or taxes withheld from employed individuals.

“We will be zeroing in on this sector [self-employed individuals],” Purisima said.

“We’re encouraging them to go to Internal Revenue because they have the power to abate and just pay for the deficiency tax and not the penalties.”

A World Bank study had earlier estimated that the government may still collect taxes equivalent to about 4 percent of the country’s gross domestic product using the current tax structure.

A study by the Asian Development Bank has found that the Philippines has one of the highest tax rates in Asia, but its untaxed underground economy is also among the largest in the region. –Elaine R. Alanguilan and Roderick T. Dela Cruz, Manila Standard Today