BIR aims to collect P200-B in tax from self-employed professionals

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Thursday, March 20, 2014


SECRETARY Florencio “Butch” Abad of the Department of Budget and Management (DBM) yesterday said that self-employed professionals like doctors, engineers and lawyers have an estimated combined annual income of more than P500 billion, but the Bureau of Internal Revenue (BIR) was able to collect taxes of only P11.3 billion last year.

Speaking before the Full Council Meeting of the Regional Development Council (RDC) at the City Sports Club, Abad said this is the reason why BIR Commissioner Kim Henares want to collect at least P200 billion from them this year.

“If you go by the rosters of actually practicing professionals, at the minimum, we should be collecting P500 billion a year. So, Commissioner Henares hopes to collect P200 billion this year. And that P200 billion will translate into more programs and projects for our social protection, social services, infrastructure and economic expansion,” Abad said.

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The professional tax has become controversial in the past weeks after the BIR published in the newspapers that public school teachers are paying more taxes than doctors and lawyers.

Sin tax

Meanwhile, Abad said that the sin tax, which the government collected from tobacco, cigarettes, and wines and liquor business, will all go to health services.

“In the sin tax reform, we originally projected that in 2013, we would collect P35 billion. We actually collected P52 billion. So, there was a P17 billion windfall from that. So, it is not true that if you impose the tax, there was a contraction and reduction in the industry,” Abad said.

He said what happened was that there was not much change.

“We even went far beyond our target,” Abad said.

The secretary said that in their observation at DBM, the challenge really is how local and national governments can execute the budgets and deliver programs and services as fast as possible with the minimum leakages and with maximum transparency to the communities.

Challenge

“That is really the challenge. And that’s part of the reason why I want to address you (RDC) this morning. We want to look at different modalities that will allow us to bypass the bureaucracy so that the government’s programs and services go directly to the communities that need that”, Abad said.

He said that the focus of the remaining period of the Aquino administration is rehabilitation and reconstruction program, like shelter services and the restoration of livelihood and employment.

“We are in discussion with the World Bank, Asian Development Bank (ADB) and the different leagues of local government officials, civil society organizations, state universities and colleges to discuss how can we get this resources directly to the communities or with minimum of intermediaries,” Abad said.

Published in the Sun.Star Cebu newspaper on March 21, 2014.

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