Henares: Ad on tax-cheating doctors a statement of fact
MANILA, Philippines (UPDATED) – Bureau of Internal Revenue Commissioner Kim Henares on Tuesday, March 4, defended a BIR advertisement which has come under fire for depicting doctors as tax cheats.
Henares said in an interview with ANC's Headstart that the BIR ad, which showed a doctor piggybacking on a school teacher to illustrate the burden of improper tax payment, is "not insulting" contrary to the claim of the Philippine Medical Association (PMA).
"It's not insulting; it's just making a statement of fact. Di ba, there's a saying, 'Bato-bato sa langit, ang tamaan 'wag magalit'? If you're paying the right taxes, it's not alluding to you. If you're not paying the right taxes, then it's talking to you," she said.
Henares said the other problem is that patients either do not ask for receipts as they don't need them to deduct the expense from their income, for tax purposes, or out of embarrassment.
She said doctors, just like any other provider of services, are required to issue receipts.
Henares said in the case of doctors, the BIR would determine incorrect tax payment based on the report of the Philippine Health Insurance Corporation (Philhealth) and health maintenance organizations (HMO) that pay for their services.
"They submit a report whom they paid it to, how much. And we will put it in our data warehouse, and we will match it with what Philhealth or the HMO said, that they paid Doctor A P100,000, Doctor B P2 million," she said.
PMA president Dr Leo Olarte, on the other hand, said the ad offends doctors who pay their taxes. “Nalulungkot kami,” he said. (It makes us sad.)
He also denounced the portrayal of doctors as a burden. Doctors, after all, “are dealing with lives.” (Watch more in the video below.)
“Sana ang ating mga kaibigan ay hindi magkakasakit o hindi mapunta sa kuko ng kamatayan, at mangangailangan sila ng mga doktor. Kung pabigat ang mga doktor o kung walang mga doktor, hindi natin malalaman kung paano na lang ang bayang Pilipinas,” Olarte said.
(I hope our friends wouldn't get sick or fall in the clutches of death, and need the help of doctors. If doctors are a burden, or if there are no doctors, we wouldn't know what would happen to the Philippines.)
On Headstart, Henares added the ad was designed with the Filipino psyche in mind, since Filipinos are known to follow rules out of fear or embarrassment.
When asked why the BIR does not approach taxpayers with love – an apparent jab at her reputation of being a ruthless BIR chief – she said: "The BIR is 100-plus years old. We have always been approaching taxpayers with love for 100 years. Has it ever gotten the country anywhere?"
Henares also said she is not as heartless as some people portray her to be because of her all-out campaign against tax cheats.
"I do [have a heart]," she said in Filipino.
Henares said there seems to be an impression that she is after small taxpayers, but the truth is that the BIR is prioritizing big fish, since it does not have enough resources to go after all tax cheats simultaneously.
"That's why we're making pakiusap. Nakikiusap kami na mamamayan ka ng Pilipinas, you should love your country and help it by following the law. So hindi ibig sabihin that we're going after them full blast," Henares said.
(That's why we're making an appeal. As a citizen of the Philippines, you should love your country and help it by following the law. So it doesn't mean that we're going after them full blast.)
That doesn't mean, however, that the BIR does not have the potential small tax cheats in mind.
Henares reminded all businesses that sell services or goods for more than P25 that they are required to issue receipts.
She said online sellers and home-based businesses are not tax-exempt, and that landlords of retailer-tenants who are not registered taxpayers can be held liable.
On criticism that the BIR is stifling entrepreneurship with its iron fist approach, Henares countered that the bureau is actually helping them grow by instilling in them good business practices.
"We're not choking the middle class…. If you do not issue receipts, you do not pay the right taxes, you can never grow big because…you grow big by selling to big business…. For them to buy, you have to have a receipt or they cannot deduct it as an expense," she said.
Concession to Pacquiao
Henares admitted that she had to take the "middle ground" in the case of boxing champ Manny Pacquiao, who has an alleged P2.2 billion-tax liability, though she would pursue a tax evasion case against him if he fails to pay.
"When we ran after him, one half of the world said, 'Why are we running after him?' Then the other half is saying, 'Why don't we do the tax evasion?' What we did is a middle ground between the two," she said.
Henares said the only concession the BIR gave to Pacquiao is to give him the opportunity to pay his tax liability before pursuing a tax evasion case against him.
"We were sensitive to who he is, and we are sensitive to the honor that he gave the country, and we are also sensitive to his ongoing fights. I'm just being honest," she said.
Henares said so far, Pacquiao has only paid the P40-million value-added tax deficiency assessment, and has yet to send any payment "proposals" to the BIR.
PDAF scam lawmakers next?
Henares said the BIR may have a bigger tax assessment on businesswoman Janet Napoles and husband Jaime, both facing tax evasion charges, depending on the outcome of their case pending before the Ombudsman in connection with the pork barrel scam.
"What we filed is only what we have. We did not include yet the PDAF (Priority Development Assistance Fund) or anything, because once the PDAF (case) comes out and what the Ombudsman decides, then we will add it to our assessment," she said.
When asked if the BIR is poised to file cases against any politician, Henares referred to the ongoing pork barrel scam investigation which has implicated several lawmakers.
"On the PDAF, there's an ongoing investigation by a lot of people, including us. I think that is all I can say at this point," she said. (READ: BIR checking assets of PDAF scam suspects)
The BIR has a target collection of P1.456 trillion this year.
Palace defends BIR
Also on Tuesday, Communications Secretary Herminio "Sonny" Coloma defended the BIR and its efforts, and joined the agency in urging Filipinos to pay taxes.
Coloma said the Philippines aims to increase the country’s tax-to-GDP ratio to 16 to 18% by 2016. As of 2013, the ratio reached 13.6% – still below the 17% recorded prior to the Asian financial crisis in the 1990s.
"The government is committed to strengthening its tax collection efforts and make its tax-to-GDP ratio at par with its ASEAN counterparts. According to a World Bank report, the tax effort of Thailand, Malaysia, and Singapore stands at 17.6%, 16.1%, and 13.8% respectively," he said.
"We call on all professional organizations to urge their members to pay the right taxes and help in the country’s overall economic development efforts."
The Palace also defended the BIR's campaign, acknowledging "the professional organizations may have differences with the BIR in the aspect of creative presentation of the advertisements" but it urged Filipinos "to look at the bigger picture."
Coloma said Malacañang continues to appeal to the "civic spirit" of Filipinos to help sustain the country's economic growth, adding the effort is more persuasive than punitive. – Rappler.com