MANILA, Philippines – President Rodrigo Duterte is pushing for the use of gross taxation system over net tax collection in a bid to eliminate corruption in the government.
Duterte floated the idea on Thursday, saying the adoption of gross taxation system would significantly reduce corruption, starting in the Bureau of Internal Revenue (BIR).
The president previously made mention of this proposal during a media interview in Malacañang on Tuesday.
“Pag gross, wala na. ‘Yang mga examiner, wala nang trabaho ‘yan. Dito ka sa neto eh kasi may mga ano, bayaran, exemption ganun,” he said.
“Kung sinsero talaga kayo and you are on my side to stop corruption, if media would really help government and the Filipino people, all you have to do — tayong lahat, we agitate Congress, gross na tayo,” he added.
The president, however, did not elaborate on how the suggestion will be implemented.
Gross income tax is a tax assessed against the money somebody earns and is applicable to income from a job, as well as to funds that are set aside in an estate or trust.
While net taxes, are levied on production less subsidies received. It also 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.
Duterte said that the need for examiners will be eliminated if the computation system of corporate taxes will be changed.
“I guarantee you, ‘pag pumunta tayo ng gross, wala ng examiner, wala ng deduction then they do not haggle for anything. ‘Pag nandiyan na ‘yung resibo, ‘yan na ‘yun,” he said.
The chief executive said this form of tax is already being used in foreign countries, including Hong Kong, Singapore, and Japan.
In response to Duterte’s suggestion, the Department of Finance (DOF) said it will look into shifting to gross taxation.
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