THE chairman of the Development Budget Coordination Committee (DBCC) is backing the President’s call to adopt gross taxation system instead of the net tax collection in a bid to remove corruption in government revenue agencies.
Acting Budget Secretary Wendel E. Avisado said he agrees with the President’s proposal. The DBM executive said adopting the gross taxation system will give a “much clearer picture of the overall performance or gross revenues of corporations.”
“[This will allow the government] to collect a more accurate and fair income tax rather than on the net with all the deductions that may not be accurately stated or should not have been included and other underlying reasons,” Avisado told the BusinessMirror. Asked if the DBCC will be meeting soon to study the recommendation of the President, Avisado said he will have to defer to the Department of Finance (DOF).
On Friday, Finance Secretary Carlos G. Dominguez III said there is a recommendation from a group that will look into the chief executive’s proposal.
Citing the recommendation, Dominguez said, the group will be headed by the executive secretary; with officials from the Department of Justice and the DBCC as members.
Aside from DOF and DBM, the DBCC also includes the National Economic and Development Authority.
In a speech in Bataan on Thursday, Duterte once again reiterated his suggestion to shift to gross taxation as this would eliminate 70 percent of corruption in government.
“I am challenging everybody. You want to stop corruption? Lalo na ito sa BIR [Bureau of Internal Revenue], we go gross. Iwanan niyo ’yang neto, [Especially here in BIR, we go gross. Leave that net income]. Duterte said “Ewan ko bakit. But I’m challenging Congress and every Filipino; I guarantee you, ’pag pumunta tayo ng gross wala na examiner, wala ng deduction then they do not haggle for anything. ’Pag nandiyan ’yung resibo, ’yan na ’yun. [I don’t know why. But I am challenging Congress and every Filipino; I guarantee you, if we go to gross, there will be no need for the examiner, there will be no deduction then they do not haggle for anything. If the receipt is already there, that’s it.]”
Gross income tax is a tax assessed against the money somebody earns. This form of tax is applicable to income from a job, as well as to funds that are set aside in an estate or trust.
Net taxes, on the other hand, are taxes levied on production less subsidies received. Also, net taxes are taxes paid to the government less transfer payments.
Net taxes are a simple version of a checkbook balance for governments as they measure the inflows and outflows of the state’s tax activities.
Aside from adopting gross taxation, the President also called for the elimination of customs brokers. which he said “would have cut corruption overnight.”