BusinessWeek Writes: The Philippines’ Tax Sheriff Gets Tough
When Kim Henares took over the Bureau of Internal Revenue in the Philippines three years ago, she began looking for tax dodgers by poring over the society pages of newspapers and magazines. She says that as a result, she sent federal prosecutors complaints against two television actresses, a doctor, and a Lamborghini-driving pawnshop owner. “If you’re ready to flaunt it, then you must have paid taxes on it,” Henares says.
Her take-no-prisoners approach is part of President Benigno Aquino III’s crusade to erase a Philippine legacy of graft. Not paying taxes is one of the nation’s most common forms of corruption; the government estimates that $10 billion, or 4 percent of gross domestic product, goes unpaid every year. Henares says it’s her job to claw back as much of that as she can, and “if people don’t like me, that’s fine.”
Her agency alleged in 2011 that former President Gloria Arroyo’s son Juan Miguel had evaded taxes. His mother, a friend of Henares’s in-laws, had played a prominent role at her 2001 wedding. The case is continuing. Ruy Rondain, Juan Miguel Arroyo’s lawyer, says his client believes the charges are politically motivated. “There’s no case, so they made one up,” Rondain says. Last year, Henares’s agency asked prosecutors to file charges against former world boxing champion Manny Pacquiao, who’s now a federal legislator, for allegedly failing to submit documents proving that he paid the correct amount of taxes in 2010. A city prosecutor declined the agency’s request to file charges. Pacquaio told the Associated Press the complaint against him was “plain and simple harassment.”
Henares doesn’t discount the official statistics as a sign of progress. But for proof that her crackdown is haunting the country’s moneyed elite, she points to a more informal source. Henares says her mother hears from acquaintances that it now can cost 60 percent more than in the past to bribe an official for help dodging taxes.
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Of course the headline above is a joke. I just wanted to bring as much attention as I could to the article for those living and/or working in the Philippines.
Overall it’s a great step forward for the country and it is always nice to see international recognition. As much as I hate paying taxes, it is one of the most important steps in fighting corruption and setting up a fair taxation environment that Philippines so desperately needs.
A fair taxation and representation system is a must key step for any future economic growth. Without any such structure only a small percentage of the overall economy/people will benefit. I wish Kim Henares all the luck she needs.
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