22 August 2019
Kim Henares, chief tax collector of the Philippines, won't take no for an answer. Photo: Bloomberg
Kim Henares, chief tax collector of the Philippines, won't take no for an answer. Photo: Bloomberg

Unloved? Philippines’ tax chief couldn’t care less

Kim Henares, the Philippines’ chief tax collector, doesn’t care if she’s unpopular.

The head of the Bureau of Internal Revenue has been fending off attacks on two fronts.

In Congress, she has been fighting efforts to lower the country’s income tax rate, while the private sector has accused the bureau of being “antibusiness” and scaring off potential investors.

“You have to do what is right, collect the right taxes — and not mind being unloved,” Henares, the commissioner of internal revenue, told The Wall Street Journal in a recent interview.

Since taking over the bureau, which used to be infamous for its corruption, in 2010, Henares has focused on increasing tax revenue by imposing fresh discipline at an agency once known for its highly selective application of the tax code, and by cracking down on tax dodgers.

The growing tax revenues have helped fund the government’s efforts to develop the Philippines through education programs and large infrastructure projects.

But on Wednesday, a group of 20 Philippine and foreign business organizations condemned the bureau for allegedly withholding about US$330 million in value-added tax refunds, which companies buying or selling various goods and services are entitled to claim.

Henares denied she was withholding the refunds. The business groups had overestimated the amount of reclaimable VAT, she said, and should take their grievances to the Court of Tax Appeals.

Meanwhile, Henares said she was firmly against any attempt to lower the country’s income tax rate.

The Philippines has a top income tax rate of 32 percent but collects less tax — US$27.1 billion last year, 15 percent more than the year before — than Southeast Asia’s other major economies.

Retaining the top tax bracket was necessary, Henares said, even if some neighboring countries had lower personal income tax rates.

“We are still developing — don’t compare us with Singapore, or Hong Kong or Malaysia,” Henares said.

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