A simplified and improved tax administration will raise an additional P726 billion worth of revenues for the government, according to the Finance Department.
Finance Secretary Carlos Dominguez III said in a recent tax reform forum that P726 billion or about 6.44 percent of gross domestic product could be collected if the tax administration and tax policy in the Bureau of Internal Revenue would be improved.
“We can collect around P726 billion or 6.44 percent of GDP if we simplify, address inefficiencies, and remove loopholes in BIR tax administration and tax policy,” Dominguez said.
He said the relaxation of the bank secrecy law for tax fraud cases and making tax evasion a predicate crime to money laundering would be critical to bridging the gap.
Dominguez said automating electronic filing and payment, reducing the number of pages and fields in tax forms, preparing simpler forms for micro and small taxpayers could bridge these inefficiencies.
The agency also plans to expand the large taxpayer service from 2,000 to at least 3,000 large corporations and hire young Filipinos of competence and integrity into 10,000 vacancies at the BIR.
“We are focusing on making payment of taxes simpler and easier. We are looking at further segmentizing our taxpayers by including a medium-sized taxpayers division to better address the needs of these taxpayers,” Dominguez said.
“Recovering the tax gaps we have mentioned is already set in the revenue targets of the BIR and BOC. But without reforms in tax policy that make it easier for the bureaus to collect and taxpayers to pay their taxes, recovering these tax gaps will be impossible,” he said.
Meanwhile, the Finance Department said close to 4.7 million taxpayers earning P250,000 or less a year would no longer have to pay personal income taxes by 2018 under Package One of the comprehensive tax reform program.
Another half-million plus taxpayers earning between P250,000 and P400,000 will pay taxes equivalent to only 20 percent of their incomes in excess of P250,000, under the proposed tax plan.