I find the title appropriate to a study made by the World Bank that says “for every peso of individual income taxes collected by the government, salaried employees shell out about 92 centavos while the self-employed and professionals pump in only 8 centavos”. This, I find hard to believe.

Well, this needs an explanation. I did not read the full report yet. I say “yet” because I am really curious at how the World Bank study arrived at this observation. For example, this may be caused by a “bloated” bureaucracy that results in the high percentage of the total revenues collected from withholding taxes on the income of fixed salaried employees.

It does not cite a per employee figure that would somehow show that the average self-employed taxpayer pays more taxes than the average fixed income earner.

The study further states that “in 2005 salaried employees paid a total of P94.2 billion in taxes compared to self-employed and professionals who contributed only P8.2 billion”.

Whatever be the figure on average income tax payment for the self-employed and professionals – such as doctors and lawyers, still this situation deserves to be looked into deeply by the national government to make the income tax system really progressive, meaning those who earn more should pay more taxes.

The study notes that the National Tax Research Center estimates that during the last five years these self-employed and professionals evaded taxes amounting to about P25.5 billion.

These are no small figures, by any stretch of the imagination.

Something has got to be done about it, and soon.

One of the biggest obstacles to development of this country at this time is the huge budgetary deficit of the national government that is estimated to reach P125 billion this year. Addressing this problem and solving it is a way of closing the deficit.