Filing of tax cases vs high-profile individuals to continue

Tax evasion charges will be filed against high-profile individuals despite criticisms that they are politically motivated, Malacañang said yesterday.

Press Secretary Ignacio Bunye said the Bureau of Internal Revenue (BIR) aims to send a message to showbiz personalities that the government will not hesitate to charge tax evaders even if they are perceived to be powerful.

"The filing of cases against high-profile individuals should serve as a fair warning to those who continue to disregard the law," he said. "The BIR drive against all those who have been negligent in paying their obligations will be relentless."

Bunye denied that the filing of cases against movie stars Richard Gomez and Judy Ann Santos — who are both identified with the opposition — was politically motivated.

The BIR has also filed similar cases against some professionals who are prominent in their fields, Bunye said.

Gomez and Santos actively campaigned for opposition candidates in the May 2004 national elections.

Last week, Internal Revenue Commissioner Guillermo Parayno reported to President Arroyo that the BIR would further improve the effectiveness of tax administration.

Tax evaders will be punished, while honest taxpayers will be able to comply with their tax obligations with greater ease and convenience, he added.

Parayno said tax collections would be improved through advanced technology, particularly in the detection of tax evasion; intensive enforcement and legal action; intensive public information and education; and programs to motivate and enhance the performance of BIR officials.

The BIR aims to sustain the momentum of increasing collections through its recent policy shift in handling tax offenders, he added.

Parayno said tax evaders will be prosecuted and the entire unpaid amounts will be pursued through garnishment of bank accounts and levy of properties.

The policy is a marked departure from the past offers of compromises and amnesty for tax evaders, he added.

Since March, 16 high-profile tax evasion cases have been filed with the Department of Justice under the Run After Tax Evaders (RATE) Program, Parayno said.

Yesterday, the BIR briefed showbiz personalities on the filing of income tax returns to educate them and remind them of their tax obligations.

The Entertainment Professionals Briefing was held at the BIR’s National Training Auditorium in Quezon City to help the entertainment industry professionals avoid charges of tax evasion.

Quoting BIR figures, Parayno said more than 88 percent of performing artists paid income taxes or net of withholding at a ratio of less than one percent of their stated gross earnings, while 33 percent of them did not pay anything.

"We just want to give emphasis to the urgency of filing returns correctly and/or rectifying whatever failures, deficiencies and understatements that entertainment professionals may have committed before the door is closed for such legal remedy," he said.

Entertainers had declared an expense-to-gross income ratio of at least 75.45 percent to as much as 86.6 percent of their total income, he added.

Parayno said professionals, including those from the entertainment industry, are required to pay withholding taxes equivalent to at least 10 percent of their gross income.

"Thus the tax briefing, so we could disseminate instructions on how to report and pay the concerned professionals’ taxes and to make the correction or rectification on tax returns," he said.

Parayno said a "tax clinic," wherein showbiz people can consult on tax-related matters, would also be set up at Revenue Region No. 7 in Quezon City.

"Don’t wait for a case to be filed against you before you correct (your tax filing) because when that time comes, we’re sorry to say that there’s no turning back," he said.

Parayno said the highest paid entertainment professional, who declared a gross income of P26.237 million, did not pay anything aside from the P4.949 million in taxes withheld from him.

"This means that the deductions claimed by the said entertainer were computed to come up with a tax due that will just equal the taxes withheld from him," he said. — With Katherine Adraneda