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Go after big tax evaders, not market vendors, BIR told

The Aquino administration should go after big tax evaders instead of picking on pedicab and tricycle drivers, sari-sari store owners and market vendors, two lawmakers said on Thursday. Valenzuela City Rep. Rexlon Gatchalian and Bayan Muna Rep. Teddy Casiño made this joint assertion after a tax official said a receipt should be issued for those selling goods and services worth upwards of P25. Bureau of Internal Revenue (BIR) Commissioner Kim Henares, in making the proposal, had earlier said that the move will help document sales, making it easy for the government to monitor transactions. “Sinasabi nila na market vendors (lang) pero mas malaki ang kinikita nila kaysa sa mga tao na empleyado. ‘Yung mga empleyado na hindi malaki ang sweldo, kinakaltasan, nagbabayad ng buwis," Henares said in GMA-7's “24 Oras" newscast. (They say that they are just market vendors, but they earn more than office employees. Employees who don’t earn a lot pay taxes deducted from their salaries.)
The BIR is likewise studying plans to create a way for self-employed individuals, such as pedicab and tricycle drivers, to file their income tax returns and issue receipts. Henares, however, was quick to add this is not the bureau’s priority. “Eventually, slowly, but not now," she explained. The result, Henares said, is to make tax collections easier, helping boost government revenues and plug the swelling budget deficit that reached P196.7 billion in the first half of 2010. Go after big fish, BIR told However, the proposal was thumbed down by the two members of the Lower House. “It should go after the big system-loss clients, yung mga malalaking hindi nagbabayad ng buwis. Wag tayong magretail na pati yung maliliit na mamamayan na wala namang kasalanan sa budget deficit ay yun pa ang habulin natin," said Gatchalian. (It should go after the big system-loss clients — the big ones who do not pay taxes. Let’s not go retail, going after the small folk who after all are not to blame for the budget deficit.) The BIR was already on the right path at first when it filed tax evasion cases against pawnshop chain owner William Villarica, he said. “Alam naman natin yung pamasahe sa mga ganyan, even sa tricycle, kulang pa pambayad ng tumataas na presyo ng diesel. Ano pa ang maiiwan sa kanila kung bubuwisan natin sila," the lawmaker pointed out. (We all know that income from fares like this, even with tricycles, are insufficient to pay for rising fuel costs. What will remain with them if we tax them?) It would be a "mission impossible" to track down every single pedicab driver and ask them to produce receipts and pay taxes, he said. “I’m curious how she [Henares] will intend to tax pedicab drivers. How do you go about that?" Gatchalian asked. For his part, Casiño said that the ones to be taxed should be those driving SUV's (sport utility vehicles). Now is the right time for Congress to review the country’s taxation system, especially regarding the value added tax (VAT), Casiño said. “I think Congress in fact will have to revisit whether it will have to remove or exempt some of the basic utilities from the VAT para lang makatulong dun sa maliliit natin (so that it can help the poor)," he said. “I guess these pedicab drivers and tricycle drivers will now have a new ally in Congress in the person of Mikey Arroyo," Casiño quipped. He was referring to the son of former president Gloria Macapagal-Arroyo, Juan Miguel, who was recently allowed to return to the House of Representatives by being accepted as first nominee of the party-list group Ang Galing Pinoy (AGP). The young Arroyo, a former Pampanga representative, is supposed to represent security guards as AGP nominee. Casiño said: “Pwede siguro nila ilapit ang kanilang concern doon, tutal siya naman ang kinatawan ng mga drivers." (They could probably forward their concerns to him since he represents the drivers.) Vendors earning a lot? Business owners meanwhile seem divided on the issue. Hardware store owner Lilian Ang, who said she has been issuing receipts since she started her business, said it is just right to compel vendors to issue receipts. “Para meron ding income ang government (So that the government will also earn)," she said in the GMA-7 newscast. “These vendors, they earn a lot. The meat vendors, they have apartments and cars. You know why? They don't issue any receipts," customer Ana Flor Tuason added. Meat stall operator Boy Lopes explained, however, that he does not issue receipts unless the customer asks for it, otherwise their already meager income will further be cut down. “Sa isang baboy, mga P400 lang. Magbabayad ka ng helper, tagatastas, upa sa pwesto. Kukulangin. (From one pig, you earn only about P400. You pay for helpers, rent a stall. The income won't be enough)," Lopes explained Pedicab driver Danny Velasco meanwhile said the government should make sure that taxes go to projects and services for the people, instead of to corrupt politicians. Suarez’ four tax measures Meanwhile, Quezon Rep. Danilo Suarez said if the Aquino government is keen on putting a plug on the budget deficit, it should consider his four tax revenue measures that would generate needed funds. He had filed a bill calling for a creation of the National Gaming Commission. Suarez, former chairman of the House committee on oversight, said that in his proposal, an umbrella agency for the gaming operations of the government would be created to collect tax for horse-racing, cockfighting, small town lottery, lotto, sweepstakes, and casino. He even predicted that if government allows franchises for casino operations, enough funds would be available to slash the budget deficit, projected at P325 billion by the end of 2010. “Wynn has been offering $1 billion for a casino franchise in Singapore," he said. Wynn Resorts is a major casino operator based in Las Vegas but with operations in Asia. Suarez also proposed using the Laguna Lake as potential water source for Metro Manila, which he estimated could generate P1.8 billion annually from the collections of VAT; reviving the "sin tax" measure by increasing tax rates on imported tobacco leaves, cigarette paper, and other materials used in making cigars and cigarettes; and placing a meter scheme to determine the right taxes that telecommunication companies should pay. A study made during the Arroyo administration showed that the Laguna Lake can produce at least two billion liters of potable water daily, Suarez said. “Laguna Lake can solve both the water and financial crises that has plagued government," the Quezon lawmaker said, as he stressed the need to undertake dredging works and construction of additional water treatment facilities so that the lake can supply 35 percent of Metro Manila’s water requirements. - with Jerrie M. Abella/RJAB Jr./JV, GMANews.TV