On taxes of Cebu lawyers, Lawyer: Shame ad not needed

CEBU, Philippines - The Bureau of Internal Revenue print advertisement on the income taxes of lawyers in Cebu and Davao was unnecessary, according to former Integrated Bar of the Philippines - Cebu City Chapter president Michael Yu.

Atty. Yu told The FREEMAN that most Cebu lawyers handled pro bono cases and contingency cases, or that they represented clients for free.

He said that instead of the advertisement, the government should recognize Cebu lawyers because they have been helping those who cannot afford legal fees by taking on pro-bono cases.

“On the shame campaign ad, it is unnecessary, because our prac tice in Cebu City is unlike in Metro Manila.  It is common with Cebuano lawyers to handle pro bono cases and contingency cases, because they also have to adjust to the economic conditions of the clients,” Atty. Yu said.

“I am not privy to the practice of my colleagues. But lately, there have been campaigns by IBP Cebu City chapter to encourage their lawyer-members to register as taxpayers and pay the right taxes. We had a symposium with BIR Regional Director Hermeno Palamine and its legal division last quarter of 2013 and I believe that it is bearing fruit. I am hopeful that many of our members are complying,” he said in a text message.

“The Cebuano lawyers are helping more…the less fortunate, which should be also recognized by the government,” he added.

Current IBP-Cebu City Chapter president Elaine Bathan also said “not all lawyers are similarly situated” it would help if the BIR would divulge how it came out with the figure.

This, as she said that their chapter has been encouraging members to faithfully declare their total income and pay the right taxes.

The BIR paid for a full-page advertisement that came out in yesterday’s issue of the Philippine STAR, which stated that one out of five lawyers in Cebu and Davao declared less income tax dues than the average public school teacher.

In the same advertisement, BIR said there are 713 registered taxpayer lawyers in Cebu and 626 in Davao.

BIR said 96 of the 713 Cebu lawyers and 179 out of 626 Davao lawyers declared a 2012 income tax dues of less than P27, 360, which is the income tax due of a public school teacher earning P222,552 a year or P18,546 a month.

Averaging would show that the total of 275 lawyers from Cebu and Davao represent around 20.5 percent, or two out of 10, of the total of 1,399 taxpaying lawyers.

The same ad stated that for Cebu lawyers, the median declared income tax due is P8,738.82 and P14,607.31 for Davao lawyers. And aside from zero tax due, the lowest declared income tax due that Cebu lawyers declared is P199, and while their Davao counterparts declared P200.

The figures are based on BIR Integrated Tax System data from its revenue offices in Cebu and Davao.

“We are not aware where the BIR got their figures and statistics, but it bears to note there are various factors to be considered in the field of legal profession; the years of practice and the type of practice, among others,” Bathan said.

“Not all lawyers are similarly situated so we’d like to know the basis as to how the ratio was reached. This does not however conclude non-payment of tax. However, as a chapter, we continue to encourage our members to file taxes. This holds true to all professional taxpayers,” she added.

Meanwhile, BIR Regional Legal Chief Neri Yu told The FREEMAN that prior to the ad’s publication, his office has sent letters to the concerned lawyers.

Yu said that while many lawyers responded to their letter, some have refused to heed the BIR notice.

“Dapat mo-comply sila sa certain requirements para ma-prove nga walay under-declarations,” he said.

He, however, said they could not yet give a specific figure as to how many responded to the notice because they have to segregate them.

For University of San Jose-Recoletos School of Law Dean Jonathan Capanas, a lot of factors affect the amount of income tax due of a lawyer.

“Naay factors ana like new lawyer, or senior citizen na nga wala na kaayo nag-practice; naa pod uban nga basin gamay og income tungod wala kaayoy engagements or dagko nga clients. Daghan og factors, so dapat dili siya i-generalize,” he said.

Capanas said that if it is questionable that one out of five Cebu and Davao lawyers pay less than an average school teacher, the BIR has to consider that more are actually truthful in paying taxes it should therefore not generalize all lawyers.

“Apil pod ko anang practicing lawyers, pero nagbayad ko. Matawag rana siya’g other income nako kay employed man pod ko and naa koy withholding tax,” he said.

Capanas, though, said it is a possibility that some practicing lawyers do not declare their income truthfully, but this is not conclusive.

Asked about the BIR advertisement, he believes it shows that it is serious in going after professionals, not just lawyers, who do not declare properly their total income tax dues. — /RHM (FREEMAN)