No More Kano Tax At The Doc-Display Rates

[Jollygoodfellow]

BIR will require doctors, lawyers to display their rates in offices

 

MANILA - Doctors and lawyers will soon be required to publicize their professional fees in their offices, the Bureau of Internal Revenue (BIR) said today.

 

"We will come up with a revenue memorandum circular which will require all doctors, as well as other professionals, to post their rates," BIR Commissioner Kim Henares said.

 

"This move will be done so that patients will know how much to pay for, inclusive of VAT," she said, referring to the value-added tax.

 

Henares said the BIR move comes on the heels of reports that some doctors supposedly ask for extra from their patients whenever they ask for receipts.

 

"There are some doctors that require their patients who ask for receipts to pay additional charges on top of their professional fees, so that it will cover the taxes. In the first place, doctors are required to issue receipts to all their patients," Henares said.

 

According to the Department of Finance (DOF), seven out of 10 registered doctors in Makati alone pay less than P60,000 in annual income tax.

 

"That's roughly P200,000 a year, or less than P20,000 a month. These numbers are ridiculous at the very least," Finance Secretary Cesar V. Purisima said.

 

Apart from doctors, the DOF also disclosed earlier that lawyers and other professionals appear to be paying fewer taxes than they should have. For example, some lawyers in Bacolod supposedly paid only P200.

 

DOF data showed that professionals and self-employed individuals paid an average annual income tax of P33,441 in 2011. This, as less than half of the country's 1.8 million registered self-employed individuals paid taxes for the same year.

 

Working back, the average annual tax payment would assume incomes of P283,764 a year or P23,647 a month, which according to DOF is "unrealistic."

 

The agency is aiming to raise the average tax collected from professionals to P200,000 and to broaden the self-employed tax base to 1.8 million by 2016. Assuming this is attained, tax collections from this sector would hit P360 billion or 2.1 percent of the country's gross domestic product (GDP).

 

A measure of economic performance, GDP is the amount of final goods and services produced in the country.

 

http://www.interaksyon.com/business/69976/bir-will-require-doctors-lawyers-to-display-their-rates-in-offices

[dalidali]

Does the Phils require a VAT to be paid on "labor"....which is essentially what a professional service is..

The doctor or lawyers "time"......no goods exchanged......

[Tukaram (Tim)]

I would love to have posted prices at doctor and dentist offices!  BIR will get more tax but there won't be as much kano tax :tiphat:

[Thomas]

Working back, the average annual tax payment would assume incomes of P283,764 a year or P23,647 a month, which according to DOF is "unrealistic."

Well. Perhaps unrealistic in Metro Manila, but is it REALY unrealistic for a common doctor in a hospital in province?...

Compare - A high school teacher earn 14 000p per month. I don't remember who told, perhaps a friend of mine, who is nurse, saying normal pay for doctors in province are 20 000p per month...

[Dave Hounddriver]

Is there a law that stops them from posting a sign that says:  Locals 200 pesos per visit, non-citizens 500 pesos?

[JJReyes]

Is there a law that stops them from posting a sign that says:  Locals 200 pesos per visit, non-citizens 500 pesos?

 

The medical tradition in the Philippines is to charge based on the patient's ability to pay. The wealthy therefore subsidize for the care of indigents.  What will probably happen under this new BIR rule is the medical clinic will post the highest prices and payments are discounted based on ability to pay. The non-citizens are expected to pay the full amount.

 

I don't see how the BIR can achieve effective enforcement because the Philippines is a cash society. In the United States, every transaction can be tracked through credit card and bank check records. I can't recall a time when we paid in cash for medical services. In addition, a clever accountant will simply maintain two sets of books. 

[brock]

Dave, I have seen signs that has said entry fee locals 20p foreigners 100p

[JJReyes]

Dave, I have seen signs that has said entry fee locals 20p foreigners 100p

 

I have seen similar entry fee signs at a national park in Quezon province and the initial reaction is anger. On further reflection, the locals are theoretically tax payers supporting the park and we are not. Visitors pay a huge fee to visit Italian tourism locations while it is free to someone with an Italian resident identity card. In Hawaii, most attractions offer discounts to Kamaaina (locals) and military personnel and their families.

 

The mistake in the Philippines is a lack of understanding regarding public relations. The sign should read P100 entrance fee. P20 with Philippine cedula or i.d. This way it sounds less discriminatory.

Edited September 4, 2013 by JJReyes

[jpbago]

 

Working back, the average annual tax payment would assume incomes of P283,764 a year or P23,647 a month, which according to DOF is "unrealistic."

Well. Perhaps unrealistic in Metro Manila, but is it REALY unrealistic for a common doctor in a hospital in province?...

Compare - A high school teacher earn 14 000p per month. I don't remember who told, perhaps a friend of mine, who is nurse, saying normal pay for doctors in province are 20 000p per month...

 

 

In Bacolod, when our girls had dengue in July, I paid 26,500p cash to one doctor. He offered a discount if I paid in cash as he said that it takes 3 months for him to get paid from the hospital. He had more than 50 patients in stage 2 and many more in stage 1 dengue in two hospitals. He is a pediatrician, not a dengue doc. Both times that we went to his office, there was 6 to 8 customers waiting steady in and out all day long. Some of his patients were backed by foreigners and some were OFWs. It is a guess, but he could be making more than 1 million per month. No one will ever know.

[JJReyes]

It is a guess, but he could be making more than 1 million per month. No one will ever know.

 

If the doctor is making one million a month, the Bureau of Internal Revenue could assign an agent full-time at his office to make sure the government gets their share. The Filipino doctor is actually making more money than his American counterpart who has to pay federal and state income taxes, American Medical Association fees, and Errors & Omissions insurance. 

 

Of course, nothing beats the American doctor who got caught billing Medicare over $100 million a year. To have seen the number of patients claimed would have required an average of less two minutes consultation each, 24 hours a day, 7 days a week. It was all fraud. They were purchasing seniors Social Security numbers and processing the claims electronically using the doctor's medical license number.