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Smuggling, tax evasion biggest hurdles in tax collection: Senator Alan

Smuggling, tax evasion biggest hurdles in tax collection: Senator Alan

MANILA: Smuggling and tax evasions were the biggest hurdles in the collection and completion of tax targets which badly effect the economy of the country, said Senator Alan Peter Cayetano to focus on tax collection and the Bureau of Customs (BOC).

Cayetano said the bigger corruption problem isn’t the ghost employees or ghost projects, through which about 20% of the P2.6 trillion budget or P50 billion is estimated to be pocketed, but in tax evasion and smuggling.

He said one of the issues he will bring up is “the widespread corruption in tax collection and customs, because of the huge amount of funds that the government can earn.”

“The World Bank said that in every peso collected, two pesos are not collected. This mean tax evasion and smuggling is a bigger corruption issues,” he said. Because between two to 4 trillion pesos is the amount that does not get to the government.

He said it makes sense that people under-declare the value of their cargoes to avoid losing money, but said the consequences for the government are significant. He said collecting the right taxes could result in changes that are tangible to the public, such as using the extra funds collected to subsidize Metro Rail Transit fares, which would result in a decrease in fares for commuters.

Just last week, the administration announced the approval of fare hikes for the MRT line and the Light Rail Transit effective January 4. The increase was criticized by at least one other senator, Grace Poe, who said the hike was an insult to commuters due to the train’s poor quality.

The government has launched an aggressive tax collection campaign under tax chief Kim Henares, while new BOC chief John “Sunny” Sevilla was appointed to institute reforms in the corruption-riddled agency. Cayetano is considering running for the country’s top post come 2016.