Honest taxpayers deemed vital to good governance

CEBU, Philippines - Pursuing these slack taxpayers proves to be a daunting duty for Bureau of Internal Revenue (BIR) Region No. 13 Director Hermeno Palamine, but with new measures in place, he now hopes to go over the taxpaying populace with a fine-tooth comb.

In an interview, Palamine once again reiterated that “honest taxpayers have a critical role in good governance,” which has long been one of the banner slogans of the revenue-generating agency.

Palamine, who has just become a full-time regional director after vacating the post he concurrently held as head of RDO 82 Cebu City – South, pointed out that good governance should come as a shared effort between the government and the taxpayers.

“We complain a lot about how our taxes are being used or abused, but do we pay the right taxes in the first place?” he said.

Fallen short

According to the data presented by Palamine, only 262 of the 556 (47.1 percent) registered self-employed accountants; 1,675 out of 2,825 (59.3 percent) doctors; and 424 out of 805 (52.7 percent) lawyers in Cebu actually filed their income tax returns for 2012.

The figures were based on the records of BIR Revenue District Offices 80 to 84 in Cebu where a total of 4,186 professional accountants, doctors and lawyers were registered as of 2012 year-end.

Of the total registered professionals, a measly 276 (6.6 percent) went to pay VAT in 2012.

But the figures were even worse in Davao, where the number of professionals who filed their taxes last year could not almost breach the halfway mark of the total registered.

In RDOs 112 to 115 and 132 in Davao, only 1,726 of 3,567 professionals tendered their returns.

Cebu Tax Watch

To this end, the BIR Region No. 13, which covers the RDOs of Mandaue City, Cebu City-North, Cebu City-South, Talisay City and Tagbilaran City, is presently reinforcing the national campaign called Tax Watch to increase transparency on tax payments and encourage people to be conscientious in paying the right taxes, Palamine said.

Non-paying professionals will be closely monitored by their office, the regional director vowed.

After recently getting the green light from BIR Commissioner Kim Henares to conduct pre-audit for those professionals in Cebu who fall below the prescribed selection criteria in the audit of tax returns, Palamine said he had ordered the Assessment Division to start the comprehensive check-up last month.

He noted, however, that the pre-audit results will not be available for use until the end of this year, when they would have gathered enough information.

The pre-audits on taxpaying professionals, Palamine explained, form part of the bigger Tax Watch campaign jointly initiated by the BIR and the Department of Finance.

Tax evaders

Palamine also wanted to highlight that the bureau is still strictly enforcing their Run After Tax Evaders (Rate) program which seeks to prosecute tax evaders in the country.

Since its launch in 2005, the program has put several prominent personalities in the limelight, more notably the local celebrities, after being charged with tax evasion cases.

More recently, the case against Janet Lim-Napoles and her spouse Jaime Garcia Napoles was the 190th filed under Rate program of the BIR.

Accounting and consulting firm Punongbayan & Araullo, in a statement, said taxpayers must always remember two words when dealing with taxes – knowledge and compliance. 

“The taxpayers should have sufficient knowledge of their tax responsibilities – from the simple requirement of being registered with the BIR up to the rules that must be complied with in the filing of various tax returns and paying the tax dues,” it said.

But mere knowledge of the tax rules would be of no use without compliance to these rules.  Hence, the taxpayers must also ensure that they conform with the tax rules applicable to their transactions, it added.

The recently heightened efforts of the BIR under its Rate program, coupled with the constant pressure to meet the country’s target tax collections, are seen to leave the taxpayers with no other option but to be particularly vigilant in complying with the tax laws. 

“Undoubtedly, the bottom line is: compliance with tax rules will spare the taxpayers from distressing penalties, hefty interests and surcharges, huge deficiency taxes, and restless thoughts of possible imprisonment,” the firm said. (FREEMAN)