Has the E-VAT
been vindicated?

Published by the Visayan Daily Star Publications, Inc.

NINFA R. LEONARDIA Editor-in-Chief & President

CARLA P. GOMEZ Editor GUILLERMO TEJIDA III Desk Editor NANETTE L. GUADALQUIVER Busines Editor CEDELF P. TUPAS Sports Editor RENE GENOVE Bureau Chief, Dumaguete MAJA P. DELY Advertising Coordinator

CARLOS ANTONIO L. LEONARDIA Administrative Officer

The National Tax Research Center is urging the Bureau of Internal Revenue to put more teeth into the drive for the collection of more taxes by imposing stricter measures and penalties on violators of the law requiring the issuance of receipts.

The NTRC made the recommendation after a study of the compliance records of business with their obligation to issue receipts for all purchase made, which will facilitate the determination of the taxes they are supposed to pay the government. By not issuing the proper receipts to their customers, the owners of the companies and businesses are able to avoid paying the correct amount due to the government and are thus guilty of tax evasion.

What the NTRC also recommended is the increase in the amount of fines and penalties to be imposed on violators of the law. Its report noted that aside from being lax, the present system is also very lenient even when the violators are actually apprehended. This is because compromises are being allowed and businesses take advantage, and even abuse their privilege to enter into such compromises.

Officials of the BIR themselves have noted that about ninety percent of all businesses commit tax violations, and the most common way of doing it is through their failure to issue receipts. The agency also admitted that its failure to collect about P25 billion more in taxes was to a great part due to the non-issuance of receipts by businesses.

The citizenry protested and decried the decision of the government to impose an increase in the value-added tax they had to pay from the already unconscionable ten percent to 12 percent. And yet, reports as of the year just ended say that the collection from the reprehensible E-VAT fell short by about the same amount.

It means that the sacrifice everybody made in paying the additional tax did not produce the amount it was supposed to do. It also means that a more stringent application of the law on issuances of receipts could have made up for the lack, without our having to suffer from the highly unpopular E-VAT.*