BIR eyes doctors

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Thursday, March 13, 2014

CEBU CITY -- One medical doctor who practices in Cebu paid an income tax of only P24.50 for the year 2012. A doctor in Davao reported even less, only P19.

Either amount is way below what a public school teacher, who earns much less than a doctor, paid for the same year.

But a doctor in Cebu has also paid more than P1 million in annual income tax.


The Bureau of Internal Revenue (BIR) has reported that 40.7 percent of doctors in Cebu who are in its list has no record of having paid their income tax.

This translates to 1,150 doctors out of 2,825 with taxpayer’s identification number.

As part of its tax collection campaign, BIR has released a new ad that aims to encourage doctors to pay correct taxes.

The ad shows some infographics: Three out of eight doctors in Cebu and Davao paid income taxes lower than what the average public school teacher paid in 2012. Fifty-two percent of the 2,825 doctors in Cebu who are registered with BIR paid less than the P27,360-income tax of an average public school teacher with an annual salary of P222,552.

The ad followed the one published in national papers on March 2, showing a picture of a doctor riding on the shoulders of a teacher.

The tax campaign has received flak from the Cebu Medical Society (CMS), which sees the ad as “generalized and degrading.”

CMS president Dr. Ruben Escarda told Sun.Star Cebu in a phone interview that BIR should not generalize doctors as tax cheats just because “some” doctors have not paid the right taxes.

He believes that most of the doctors in Cebu are paying the right amount of taxes.

CMS will talk with the doctor who is the subject of the BIR’s notice for non-payment of taxes, Escarda said. CMS will leave to the Philippine Medical Association to deal with BIR.

Escarda questioned the figures released by BIR on its ad.

“Ambot nila asa sila nanguha og data, naa bay nagsurvey?” The doctor replied when asked if the BIR’s figures were true. He said most of the doctors pay the right taxes.

Doctors who serve in hospitals get their professional fees less 10 percent. One doctor said the 10 percent deduction represents professional tax.

BIR 13 Director Hermino Palamine said the ad does not intend to stereotype the medical professionals as tax cheaters but to serve as “wakeup call” for Cebu and Davao doctors who are not properly paying their tax dues.

“Doctors are not being singled out. They are our partners. If they pay the right taxes, they should not be affected,” Palamine said.

He said BIR is not singling out doctors in its tax campaign but is also calling out to other professionals like lawyers, accountants and engineers.

BIR’s national office has released more than 10 ads since January this year. The earlier set of ads targeted beauty care professionals, restaurants, lechon businesses, pawnshops, etc.

Palamine said he has not heard any lawyer, engineer, accountant or other professional who reacted negatively to the BIR ads.

He said the income tax of a doctor varies. Doctors are one of the highest paid professionals in the country.

Government doctors are faithful taxpayers because their income is fixed, he said.

Despite their being highly paid, doctors pay the least income tax, BIR deputy commissioner for operations Nelson Aspe said in news reports last year.

Atty. Neri Yu, BIR 13 legal division assistant chief, who was with Palamine during the interview yesterday, said BIR 13 has a record of Cebu’s Top 100 doctor taxpayers.

The highest taxpaying doctor has turned over P1 million in income tax to BIR.

The doctor on the 100th spot paid about P200,000.

Those not in the top 100 list paid below P200,000.

Yu explained that a teacher who earns P222,552 annually has an income tax due of P27,360. Doctors who pay tax at only P27,360 or lower is like saying that doctors have a teacher’s pay.

BIR’s Palamine said the figures cited in the ads were based on the Integrated Tax System.

He said his office has sent out letters to doctors and other professionals who have been observed by BIR to be not paying the right tax.

He said investigations are ongoing.

Palamine said the reason some doctors pay taxes lesser than other professionals is their failure to issue receipts to patients.

One should always ask for a receipt in all his transactions just as the issuance of receipts in all transactions is required, he said.

The BIR requires the issuance of receipts in implementation of Section 237 of the National Internal Revenue Code.

Palamine asked taxpayers to file their income tax returns by April 15.

Published in the Sun.Star Cebu newspaper on March 14, 2014.

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