BIR eyes 20% hike in income tax take

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is eyeing to raise its individual income tax collection this year by roughly 20 percent as it intensifies its crackdown on professionals.

The BIR said the agency is targeting to collect P192 billion in income tax collection this year from P160 billion generated a year ago.

The agency pointed out that the high incidence of tax evasion among professionals is among the tax leaks that needed to be fixed.

BIR data showed that the average annual tax payments of professionals amounted to less than the monthly minimum wage of around P8,500.

The targeted increase in individual income tax collection of 20 percent is higher than the 14-percent growth target in the BIR’s revenue collection for the year.

BIR Commissioner Kim Jacinto-Henares said the increase in individual income tax collection would result mainly from an increase in the tax filings and declarations of professionals who are now more compelled to file proper taxes.

“We have met with several professional associations from doctors, lawyers, accountants and dentists. We are asking them to police their ranks. Their oaths require them to uphold the laws in the places where they practice and that include tax laws,” Henares said.

In terms of percentage share, individual income taxes account for about 32 percent of the BIR’s collection of taxes on net income and profits.

However, the BIR said bulk of the individual income tax payments come from individuals earning compensation income whose tax payments are withheld by their employers and self-employed professionals.

These professionals such as lawyers and doctors generally earn more than regular employees but do not often issue receipts.

“Statistically, tax compliance among professionals has been low. Maybe, the associations can campaign to their members because their behavior is not acceptable and we will sanction individuals,” Henares said.

The targeted growth in the collection of individual income tax this year of 20 percent is much higher than the five- to six-percent growth of the domestic economy and is expected to come from improved tax compliance.

Citing data from the Professional Regulatory Commission, the BIR said there are some three million professionals in the country including nurses, doctors, lawyers, engineers and seamen.

Of the total number of professionals, those with higher incomes such as doctors and lawyers number around 190,000. –Iris C. Gonzales (The Philippine Star)