Latest Stories

Tax evasion cost gov’t at least P400B

Exec says losses equivalent to 4% of GDP


National Treasurer Rosalia de Leon INQUIRER FILE PHOTO

The government is losing an amount equivalent to 4 percent of the country’s gross domestic product (GDP) every year due to tax evasion, according to National Treasurer Rosalia de Leon.

She said that while the government’s fiscal health has improved dramatically since the early 2000s, there was still room to further boost revenues by addressing tax evasion.

“According to our estimates, we lose about 4 percent of GDP to tax evasion of self-employed professionals, compensation earners and corporations,” De Leon said in a bond forum organized by Bloomberg last Friday.

Based on latest official GDP figures, the losses from tax evasion amounted to at least P360 billion.

While the government has reduced its debt burden over the years, it could further trim the ratio of its outstanding debts to GDP through efforts to curb tax evasion.

“To plug this leakage, the government plans to mobilize its full bureaucracy to help the BIR (Bureau of Internal Revenue) crack down on delinquents,” she said.

De Leon cited government data showing that collection of estate taxes averaged at only P1 billion a year over the past three years.

Finance Secretary Cesar Purisima had earlier highlighted the problem on rampant tax evasion among self-employed professionals.

During the recent induction ceremony for certified public accountants, he said there were very few accountants who were registered taxpayers. Purisima added that many of those registered were believed to be underdeclaring their incomes.

Purisima made an appeal to the CPAs to work with the government in addressing revenue leakages by paying the right taxes and by refusing to sell their signatures to tax-cheating corporations.

Government data showed that taxes collected by the BIR reached P504.95 billion in the first five months of the year, up nearly 15 percent from P439.82 billion in the same period last year. This was, however, short of the agency’s target for the period.

Despite the double-digit growth, the government said it believed that tax collection could improve more if individuals and enterprises would religiously pay taxes.

Meantime, De Leon said the Bureau of the Treasury would continue implementing programs meant to help keep the cost of government borrowings low. She said the Treasury would continue looking for and taking advantage of debt refinancing.

The government’s outstanding debts of about P5.4 trillion are estimated to be below 50 percent of GDP.

The debt-to-GDP ratio has continued to decline since hitting a peak of 74 percent in 2004, thanks to improving revenue collections that tempered the need for borrowings.

But finance officials said they expected the ratio to further improve as intensified efforts against tax evasion get a big push.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , Gross Domestic Product , National Treasurer Rosalia de Leon , News , tax

  • JOHNCeneza

    Instead of looking at the tax collection, why not prioritize stopping leaks in government finances, wastage is costing the government more.

  • Pakinaskungtaeb

    We better revise our voting system like, let say for every ten thousand pesos tax paid to the government =1 voter during elections. No tax payment=no vote. Moreso, candidates must be a taxpayer also to prove that he/she truly a Filipino and a law abiding citizen of the country.

    • abbaj

      Agree with you. Dapat may weight ang vote based upon the amount of tax being paid so that those lazy squatters and paid voters can’t call the shots every election.

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Napoles surgery in Makati hospital successful
  • Save the queen? Aide takes fall for Enrile, Gigi Reyes
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • A first in a mall: Authentic Greek yogurt–made fresh in front of diners
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Banks allowed to use ‘cloud’
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Believe it or not: Filipinos love US more than Yanks
  • Marketplace