Gov’t income tax collections up in first 4 months

Government collections from individual taxpayers in the first four months of the year were considerably higher than those of the same period of 2012.

Despite the increase, there are still many self-employed and professional taxpayers who continue to declare the wrong income, setting back government efforts to generate more revenue, the Department of Finance said.

Government data showed that, from January to April this year, the Bureau of Internal Revenue collected P86.28 billion from individual taxpayers—16 percent higher than the P7.44 billion collected in the same period of 2012.

Officials attributed the significant growth in income tax collections to the economy’s favorable performance which, in turn, led to rising incomes.

The Philippine economy grew by 7.8 percent in the first quarter from a year ago, beating most expectations. It was said to be the fastest growth rate in Asia.

But the finance department, head agency of the BIR, said the government should have collected more income tax from individuals. Finance Secretary Cesar Purisima cited government findings where taxpayers, particularly the self-employed professionals, continued to under-declare their income.

He said that 70 percent of doctors working in Makati City are each paying an average of only P60,000 in annual income tax. Based on the income the doctors have declared, each of them is earning less than P20,000 a month. Purisima described it to be an unbelievably low figure.

He said that similar statistical patterns have been observed among accountants and lawyers.

Revenue Commissioner Kim Henares earlier said that the tax bureau would step up efforts to go after tax cheats, especially those who are self-employed.

The BIR also urged the public to make it a habit to ask for receipts so that the proper taxes are remitted to the government.

Purisima said the tax cheats are robbing the government of vital revenue that could have been used to fund development projects and programs.

Official data showed that taxes withheld from salaries of wage earners made up the bulk of government collection in the first four months of the year. Income taxes from self-employed individuals made up a much smaller share.

Income taxes withheld from salaries and wages of workers accounted for P66.57 billion of total collections from January to April. Those remitted by self-employed individuals amounted to only P7.57 billion. Capital gains and taxes withheld from purchases made by individuals accounted for the balance.