Date:
April 2003
Rampant Tax Fraud
An
inspection conducted by the Bureau of Internal
Revenue (BIR) among business establishments
in Metro Manila and nearby cities found out
that nearly 95 percent of them have been violating
their tax reporting requirements.
Worse,
many of these establishments were not complying
with standard business practices such as issuing
purchase receipts or maintaining proper accounting
records. The news presents a further challenge
to the government to correct the situation
and plug the loophole in its revenue collection.
Beginning
April, the BIR launched its Tax Compliance
Verification Drive with the inspection of
4,201 business establishments in Manila, Quezon
City, Parañaque, Las Piñas,
Pasay, Caloocan and Valenzuela in Metro Manila
and Trece Martires City in Cavite province.
Around
3,992 establishments or 95 percent of the
total business entities, including fast-food
chains, restaurants and gasoline stations,
were found to be violating BIR rules and regulations
in the conduct of their business. In particular,
inspections in Tondo, Manila; Caloocan City;
and Trece Martires found that 99 percent of
the establishments there have been violating
one or more BIR rules.
The
BIR also reported that 2,076 or 49 percent
of the establishments surveyed were not issuing
official receipts for purchases and that 1,535
or 37 percent were not even registered with
the BIR. Another disturbing finding is that
2,264 or 54 percent of the establishments
inspected had no books of accounts at all.
Among
other violations discovered were use of unregistered
receipts, use of multiple sets of receipts,
use of unregistered books of accounts, non-registration
of professionals, failure to properly post
the certificate of registration, and use of
unregistered cash register machines.
There are suspicions that the problem is even
worse in the provinces. Outside of the metropolitan
area, few stores, restaurants, markets and
other business outlets issue official receipts.
Most self-employed individuals including traders,
doctors, dentists, store and shop owners,
farmers, and fishermen do not pay income taxes
at all.
The
survey showed that it is the poor and the
salaried workers of companies in Metro Manila
and other urban cities who carry the bulk
of the tax burden in the country. To correct
the situation, the BIR has vowed to continue
its inspection drive among business establishments
throughout the whole country.
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