BIR wants more powers to go after self-employed
MACTAN ISLAND, CEBU — Selfemployed professionals remain an underutilized source of revenue for the national government and lifting bank secrecy laws and making tax evasion a predicate crime would help boost tax collections of the Bureau of the Internal Revenue, the agency’s chief said.
“If you want to have a reduction in tax rates, help us collect the right taxes,” BIR Commissioner Kim S. Jacinto-Henares told reporters at the sidelines of the Asia-Pacific Economic Cooperation meetings here.
Ms. Henares said lifting the bank secrecy law and making tax evasion a predicate crime would boost the government’s collections between P100 billion to P300 billion.
Predicate crimes are treated as part of a series of offenses, with tax evasion carrying a link to money-laundering in some jurisdictions because it generates illegal proceeds that must be hidden from the government.
“The people won’t be able to hide anymore. Then they’ll now be paying the right taxes,” Ms. Henares said.
Ms. Henares said the Department of Finance has estimated the number of self-employed Filipinos at 1.8 million. Only 400,000 file income tax returns, paying an average of P33,000 annually.
“If you paid P33,000, then your taxable income is just P99, 000. I think that’s way higher than that,” Ms. Henares said.
Several lawmakers have introduced measures that would bring down corporate and personal income taxes to around 25% from the current 32% rate and align the country’s rates with its Southeast Asian peers.
However, Ms. Henares cautioned against cutting income tax rates without a measure that would offset revenue losses.
Republic Act no. 1405 and Presidential Decree no. 1792 consider bank deposits as confidential in nature unless authorized by the Monetary Board based on suspicion of fraud. No law has been passed amending the country’s bank secrecy laws despite calls from tax authorities to repeal the rule. —