Collecting The Right Taxes
The Aquino administration was advised by former Finance Secretary Gary Teves to ask Congress for help in raising new taxes now while the President can still persuade the legislators in view of his current high popularity rating. The top finance man of the previous administration said that if President Aquino does not push for new taxes now, the incumbent lawmakers who will run for reelection in the coming 2013 elections will be constrained to pass new tax laws.
Teves said the Aquino administration’s current efforts to plug revenue loopholes and curb tax leakages may be insufficient to enable the country to achieve the growth that our economy needs. He also advised against the enactment of new laws that will provide more tax relief and exemptions because such laws will deprive government of funds it needs to implement programs for good governance.
We all know that our government needs more revenues to finance the various development projects that will alleviate poverty and support the nation’s growth. Minimizing corruption and having more efficient revenue collections are preferred by the present administration over new tax measures. While our people would definitely go against new taxes, some are even asking for reduction, my question is “are the agencies tasked to collect taxes really exerting efforts to exact the right amounts from taxpayers?” so that our government gets the money it needs.
I am sorry to say that I believe our tax collectors are not doing their best to collect the right amount of taxes from those who must pay them. The numerous tax cases being filed against delinquent taxpayers are not proofs of their sincere efforts to increase revenues. At best, those are proofs of their failure to collect the correct taxes as they fell due long time ago.
Regarding their failure to collect the right taxes as they fall due, I wish to cite the case of the i-café owners who, according to my educated guess, are currently numbering no less than 30,000 and located all over the country. They are among the self-employed taxpayers that I am referring to in my article about making them pay tax the easier way by allowing them to avail of the electronic filing and payment system of the BIR.
Let me present some figures based on my experience as a former i-café owner and calculate how much on percentage tax alone can BIR potentially collect from 30,000 self-employed i-café owners if they own and operate an average of ten (10) computer units each and earn PhP100/unit/day revenue in 300 days per year. Percentage tax is three (3%) of gross revenues so the total collectible can be as high as 30,000 x 10 x 100 x 300 x 0.03 or PhP270M in a year.
Take note that the above amount represents only the percentage tax and does not include yet the expanded withholding tax on rent and the income tax of the small i-café business owners around the country. Personally, I doubt if BIR is collecting an amount anywhere near the figure I present. I also do not see any effort being exerted to effect the collection of correct taxes from the industry. What do you say?