DOF expects 16.6% hike in individual income tax take

MANILA, Philippines – The Department of Finance (DoF) expects a 16.6-percent hike in individual income tax collections this year as the Bureau of Internal Revenue (BIR) steps up efforts to crack down on tax avoidance.

The government, through the BIR, is targeting to collect P248.16 billion from individual taxes this year compared with last year’s P212.82 billion.

The amount is equivalent to 15 percent of the expected tax revenues for the year of P1.6 trillion.

Income taxes from individuals account for more than 20 percent of the BIR’s tax collection, the bulk of which comes from salaried individuals whose taxes are automatically withheld by employers.

According to the government, the incidence of tax evasion among professionals and self-employed businessmen remains high.

The government noted that income tax collections from self-employed individuals have declined from 8.4 percent to 6.8 percent.

The sector, according to the BIR, constitutes only 6.8-percent of total individual income taxes, way below the 81.5-percent share of those whose taxes are automatically deducted from their salaries.

Data from the Professional Regulation Commission show that there DOF expects…

are two million active professionals while the Department of Trade and Industry’s database lists 816,759 registered micro, small and medium enterprises.

The BIR early this year said it would go after professionals/self-employed people who are paying less than P200,000 in tax yearly.

For the whole of 2013, the BIR is eyeing to collect P1.25 trillion in taxes or 17.59 percent higher than the previous year. The assumption is based on a gross domestic product growth forecast of six percent for the year.

The large taxpayers group will account for the lion’s share of collections, remitting around P768.31 billion to the government coffer or 14 percent more than what it contributed last year.

The rest is spread out among revenue regions and districts across the country as well as from non-BIR operations. –Zinnia B. Dela Peña (The Philippine Star)