Cabinet team to study Duterte idea on gross taxation

Finance Secretary Carlos Dominguez III said on Friday, Sept. 13, that top legal and economic minds of the administration will study President Rodrigo Duterte’s idea to compute corporate taxes based on gross revenue rather than taxable net income, the current practice.

The President brought this up at a speech on Thursday, Sept. 12, saying the method would help eliminate corruption in the Bureau of Internal Revenue because it would remove discretion from tax examiners and negotiations between companies and BIR officials that usually follow initial tax assessments.

In a message to reporters, Dominguez said a recommendation had been made to form a team headed by the executive secretary with officials from the Department of Justice and the Development Budget Coordination Committee (DBCC) as members.

The DBCC is an economic policy making group which is composed of officials of the Department of Finance, the Department of Budget and Management and National Economic and Development Authority.

But any changes in the tax scheme would need approval by Congress.

Speaking in Bataan on Thursday, Mr. Duterte said in Filipino: “You want to stop corruption? Here, let’s remove net and shift to gross in BIR. If we do that, like Hong Kong, Singapore, Brunei, and the rest, you would have removed about 70 percent of the corruption.”

Duterte also said that changing the computation of corporate taxes would remove the need for examiners.

“I guarantee you, if we shift to gross, no more examiner, no more deduction then they do not haggle for anything,” Duterte said. “If the receipt is there, that’s it, no more story.”/TSB