Palace: Late tax filers face penalties

MANILA, Philippines – Malacañang on Sunday, April 13 warned of stiff penalties for those who will fail to pay and file their taxes on or before the annual deadline.

Presidential Communications Operations Office head Herminio Coloma Jr reiterated the Bureau of Internal Revenue’s (BIR) call for all taxpayers to be mindful of the April 15 cutoff.

Coloma said, “Those who do not file and pay their income tax will be fined 25% of their gross income and an additional 20% interest every year.”

He reminded the public about the importance of taxes – they fund the government’s social services such as education, health care and infrastructure. He noted that taxes collected by the BIR every year account for more than 70% of the government budget.

He also said the BIR is mandated to collect no less than P1.4 trillion in taxes this year, 19% higher compared to the amount collected in 2013.

Tax-to-GDP ratio

Coloma said the government’s campaign to boost tax collection is part of its effort to increase the tax-to-GDP ratio to between 16% and 18% by 2016.

The tax-to-GDP ratio, a barometer of economic progress, refers to the percentage of taxes collected when compared to the amount of income that the country receives for its products.

Coloma said last year’s tax-to-GDP ratio stood at 13.6%, lower than the 17% recorded before the 1997 Asian financial crisis.

For more information on tax rules and announcements, visit the official BIR website. An interactive website can also assist the public in paying their taxes. You may also use Rappler’s tax calculator. – Rappler.com