Tax Evasion

A PENCHANT FOR TAX EVASION

By Ronilo D. Perez

In a press release of the Philippine Daily Inquirer dated August 1, 2013, the Bureau of Internal Revenue (BIR), through commissioner Kim Henares issued an accusing statement boldly declaring that 90% of the country's 1.7 million self-employed professionals (i.e. doctors, lawyers, engineers, architects, accountants, entertainers) are tax evaders.
These professionals paid only a total of P 9.8 billion in taxes in 2010. Ideally these professionals collectively should be paying a total of Php 100 billion in taxes annually. In response to this situation, the said Bureau issued an order to subject these professionals to an extensive audit in order to determine whether they are paying the correct taxes.
These self-employed professionals, because of their propensity of evading accurate payments of taxes, are cheating the Filipino themselves and depriving them of basic public services. Tax evasion is also very rampant in the business community. Only 105 of the 207-strong member firms and organizations of the Federation of the Filipino-Chinese Chamber of Commerce and Industry, Inc. (FFCCCII) have tax identification numbers (TIN), indicating that tax evasion in this country is also widespread in the business sector.
Only 8% of their member-firms of the FFCCCII have paid taxes, only around 50 member-firms have filed income tax returns while more or less 30 of them have filed returns with zero tax due, despite the 6.6% economic growth of the country.
What does this tax scenario tell us? This indicates that Filipino tax payers have developed this unhealthy penchant to avoid their tax obligations while they yearn to avail of good public services from the government.
Perhaps the famous saying of the late U.S. President John F. Kennedy can be aptly applied to us, to quote him as saying "Ask not what your government can do for you but what you can do for your government."
We, Filipinos, have the inalienable right to avail and enjoy better government services such as: top quality education and adequate classrooms for our kids, world-class healthcare services, cheaper electricity, low transportation fares, low-cost energy supply, better infrastructure programs (i.e. public roads & highways, etc) but we do not want to pay appropriate income taxes to enable the government to provide these essential public services to the people.
We cannot blame the government if there are shortages of classrooms for our students, poor healthcare services, rugged roads and dilapidated bridges, high cost of electricity and unreasonable transportation fares, if we ourselves, do not want to contribute our share of the economic pie by religiously paying the right amount of income taxes.
We have a democratically elected government that promises to eradicate corruption at all levels of government. However, we cannot expect this government to deliver much-needed basic public services to our people, especially to the marginalized and destitute sector of our society if we do not have a strong commitment to fulfil our tax obligations.
The tax payers can empower our government to perform its mandate, which is to serve the Filipino people and thus make this country a better place to live in for future generations of Filipinos.
As the proverbial saying goes, "we cannot make our cake and eat it too.'
In other words, there is no such thing as a cost-free economic pie.
We have to pay the price, through paying our taxes consistently, so that all Filipinos can proportionately take part in enjoying the sweetness of economic prosperity.