#AskTheTaxWhiz: How can we collect the right taxes?

Mon Abrea
The Philippine Tax Whiz discusses the key areas for reform to help the government collect the right taxes

How come the billionaires in our country are not among the top individual taxpayers? Are we not supposed to collect more taxes from the rich? I read in one of your Instagram posts that the business owners pay only 10% tax while ordinary employees pay up to 32% income tax. Is that true?

The list of top individual taxpayers is based on income tax payment. Billionaires in our country, and even around the world, are mostly shareholders of large corporations. Most of them receive dividend income instead of regular salary.

In the Philippines, dividends received by shareholders are subject to 10% final tax. It’s true that I posted that in my Instagram account @askthetaxwhiz.

As I always say, genuine tax reform or an efficient tax system should collect more taxes from the rich but not through their income. We should collect taxes based on their acquisition or consumption, like imposing higher excise tax on luxury cars. This is similar to what the Department of Finance is proposing under House Bill 4774 or the Tax Reform for Acceleration and Inclusion (TRAIN).

The Comprehensive Tax Reform Package being proposed by the Duterte administration aims to update tax rates and compliance requirements to make these simpler, fairer, and more efficient. Under the proposal, the rich and those who earn more will pay more taxes.

Can we really stop corruption in the Bureau of Internal Revenue (BIR)? Is it true that the entry level for a certified public accountant is salary grade 11 or less than P20,000 only? And we expect them to collect billions of pesos in taxes? What is the current administration doing about this?

Corruption will stop if we will stop bribing BIR examiners!

To address the low entry level salary, BIR Commissioner Billy Dulay is proposing their exemption from the Salary Standardization Law (SSL) so they can attract more competent and honest accountants and lawyers.

Commissioner Dulay already approved the promotion of more than 600 Revenue Officers, and also took over the Disciplinary Board, investigating more than 400 BIR examiners who have pending graft and corruption complaints. He even welcomes anonymous complaints from taxpayers like what his office is receiving from Malacañang through the 8888 hotline.

I am not an accountant. I don’t understand our tax system. It’s too complicated for me. How can I help? Who should we talk to? Do we have a deadline or target date to implement the tax reform package? Is it really pro-poor or anti-poor?

Be informed. Be vigilant.

If you are active on social media like Facebook, read tax-related articles so you can be updated. You can like our page, The Philippine Tax Whiz, for more tax updates.

June 2 is the ultimate deadline before the House of Representatives takes another break. We need to engage our respective lawmakers so they understand our tax problems and support the Comprehensive Tax Reform Package, as proposed by the Department of Finance and authored by Quirino Representative Dakila Cua, chairman of the House ways and means committee.

If you want to know more about the tax reform package, you can join the “Tax Forum: A Dialogue on the Proposed Comprehensive Tax Reform Package” on Wednesday, May 17, at the Ateneo Graduate School of Business.

And to help the BIR collect the right taxes, the Center for Strategic Reforms of the Philippines, in partnership with the BIR and the Department of Trade and Industry, will be launching the Seal of Honesty (SOH) Certification Program on May 31.

For more details, you can email us at consult@acg.ph or call (02) 6227720. – Rappler.com

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2016 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth. Follow Mon on Twitter (@askthetaxwhiz) or visit his Facebook page. You may also email him at consult@acg.ph.