MANILA - Teachers pay more taxes than doctors or lawyers in some areas, fiscal authorities on Monday said, adding that this discrepancy raises the absurd conclusion that those practicing medicine or law are minimum wage earners.
In a press conference, Finance Secretary Cesar Purisima said self-employed individuals and professionals accounted for a mere 6.8 percent of the individual incomes taxes paid in 2012.
According to the Bureau of Internal Revenue's (BIR) preliminary data, self-employed individuals and professionals paid P15.1 billion in income taxes last year, or less than 10 percent of the P181.7 billion paid out by employees whose taxes are withheld automatically by their employers.
Tax withheld on wages accounted for 81.5 percent of the P223 billion in total individual incomes taxes paid in 2012. The remaining amount was categorized under "other individual income."
"During our visit to a certain revenue region, we discovered that the top 10 lawyers in that region had annual income tax payments that were below P20,000," Purisima said.
"This implies that these lawyers earn even less than minimum wage. A newly hired public school teacher pays substantially more than that," he said.
Doctors in Pangasinan each paid only P800 in taxes per year, whereas lawyers in Bacolod, P200.
A radio and TV practitioner in Quezon City paid P400 a year, while a businessman in Cagayan de Oro, P1,000.
"This implies that these professionals earn even less than minimum wage earners. These numbers are ridiculous," Purisima said.
To improve the collection of taxes from these taxpayers, the government will work on increasing the tax base to 1.8 million from the 402,934 self-employed and professionals who filed their returns in 2011.
Purisima said expanding the tax base and ensuring the average payment of these taxpayers is at least P200,000 each would help bring up the country's tax effort by two percent by 2016.
"We will increase the number of those who are filing, and we will do that by looking at the listing of those who own cars, those who are members of professional organizations. We will look at the listing from the [Professional Regulatory Commission], and other listings that we can get, so that we will be able to increase the number of those who will file their returns," Purisima said.
"The next step is requiring a minimum (individual income tax payment) of P200,000 (per year for self-employed and professionals). And those with payments of below P200,000 will automatically be reviewed, because P200,000 doesn't really mean much nowadays. If you look at it, that means that they're just averaging around P50,000 monthly income," he said.
Audit set for those paying no more than P200,000 a year
BIR Commissioner Kim Henares said the bureau already issued a circular for the audit of self-employed professionals and individuals who pay taxes that are below P200,000.
"Today, I signed a revenue memorandum circular, basically stating that although all taxpayers will be audited, the priority that will be audited are those taxpayers whose average payments are below P200,000," Henares said.
"We will prioritize self-employed and professionals, and other sectors such as restaurants, and online transactions," she added.