The Bureau of Internal Revenue reported a jump in tax collection in January from a year ago as it sustained an antitax evasion campaign that was aggressive enough to antagonize certain sectors. However, the tax collection for the month was short of the official target.
The BIR attributed the shortfall to the still rampant tax evasion across a wide range of sectors, while critics pointed out the need to further enhance revenue-collection systems.
The tax bureau collected P104.15 billion in January, up by about 10 percent from P94.72 billion in the same month last year.
Internal Revenue Commissioner Kim Henares earlier expressed confidence that the BIR would easily sustain a tax-collection growth faster than the pace of the economy’s expansion, although she admitted that the official target for the year was challenging.
For 2014, the BIR is tasked to collect P1.46 trillion in taxes, about 20-percent higher than its collection last year.
The economy is expected to grow anywhere between 6.5 and 7.5 percent in real terms, and by at least 9 percent in nominal terms this year.
The BIR said it would continue implementing its antitax evasion campaign this year despite having earned criticisms from various sectors.
The campaign includes the filing of cases every other week against suspected tax cheats under the Run After Tax Evaders (RATE) program and the weekly release of print advertisements showing tax payments of sectors where tax evasion was perceived to be rampant.
The weekly print ad had elicited complaints from some of the affected sectors. For instance, the latest print ad antagonized a group of medical practitioners that said the BIR was being unfair for depicting doctors as tax evaders. The print ad showed a doctor riding piggyback on a teacher and had a line saying: “When you don’t pay taxes, you are a burden to those who do.”
The Philippine Medical Association (PMA) said the BIR should file tax evasion cases against specific doctors who evade taxes rather than show an ad depicting the entire medical industry as a sector of tax cheats.
In response, the BIR said the ad was not against all doctors but against doctors who were not paying the right taxes.
Henares said the public perception that tax evasion was rampant in the medical industry should not be blamed on the BIR.
The BIR cited statistics showing that in Cebu, more than 90 percent of registered doctors either did not pay income tax or paid amounts much smaller than what an average public school teacher did.
The aggressive campaign against tax evasion comes amid the pressing need to shore up revenue collection to meet the government’s rising expenditure requirements.
The BIR, which accounts for 60 percent of the revenues of the national government, is tasked with reducing foregone revenues due to tax evasion.
Based on estimates from the World Bank, the Philippine government loses about P450 billion a year due to tax evasion.