Why Villar not listed in top individual taxpayers list?

Businessman and former senator Manuel B. Villar said he paid about P72.2 million in individual taxes last year.

This was contrary to the Bureau of Internal Revenue's (BIR) recent Tax Watch ad which ranked the Philippines' richest and their tax payments for 2012.

The BIR said Villar, whose net worth is estimated at $720 million, was not included in the agency's list of top 500 indvidual taxpayers of 2012.

His annual income tax return (ITR) form 1701 shows:

Income tax paid composed of his individual tax payment as senator and tax on sales/exchange of shares of stocks of Vista Land and Starmalls and acquisition of real property for the year

Total annual salary at the senate
Income tax paid on his salary

The top individual taxpayers list of the BIR is based on regular income taxes paid.

Let us classify those items.

Section 24 (B) of the National Internal Revenue Code says passive income are income subject to final withholding and shall not be included in the gross income of the taxpayer. Cash and property dividends received from a domestic corporation or joint stock company are subject to a 10% withholding tax if you are a resident or citizen.

Shares that are not listed and traded in the stock exchange shall be taxed at 5% (not over P100,00) and 10% (any amount in excess of P100,000). If the shares of stocks are listed and traded in the stock exchange, the sale is not income tax. However, it shall be subject to Other Percentage Tax at a rate of 1/2 of 1% of the gross selling price.

Properties acquired for the purpose of being used for commercial purposes are ordinary assets. If the taxpayer acquired a real property, he must pay documentary stamps tax of 6% of the selling price or zonal value or fair market value, whichever is highest; transfer tax; realty taxes. Obviously, those are not regular income taxes.

Creditable withholding taxes on ordinary business income are deductible as tax credit because the income are included in the computation of the gross income. Final withholding taxes cannot be claimed as tax credit.

Villar's annual salary, income from business and profession are regular income.

If all those figures are subject to regular income tax, Villar's taxes would only land him in second place in the list of top individual taxpayers.

The list was topped by Mercury Drug chief Vivian Que Azcona. Azcona who paid P131,434,036.34 in 2012.


Author: Paul Michael Camania Jaramillo

Student| Youth Advocate | Leader | Environmental Advocate | Writer | Blogger | RH Advocate

I am neither especially clever nor especially gifted. I am only very, very curious. — Albert Einstein
I write about darkness because I want to show the light — Jose Rizal

He has been involved in different advocacy and defending human rights. As a blogger, writer, netizen and an advocate, he has found focus & interest on sexuality & reproductive health, deaf rights & legal access and youth development, leadership, environment advocacy, issues in the nation and in the world, religion, culture and human rights At the age of 14, he has fully embraced the call of leadership.

He was a Lussoc National High School 'The Sring' and 'Ang Batis' news editor. A radical visionary leader, he has led organizations of the Supreme Student Government, Science Club, Youth for Environment in Schools Organization, Interact Club, Math Club, Philippine National Red Cross and other organizations in their institution. He was also awarded as a distinguished student leader as a former officer of the Supreme Student Government and received President Gloria Macapagal Arroyo Campus Journalism Award. He attended two National Leadership Training for the Student Government Officers, Rotary Youth Leadership Awards, Youth for Environment Summer Camp, Science Leaders Congress and Schools Press Conference. Joined and won in the several contests from their school to the national level.

He is an organist and an officer of the Church of Christ (Iglesia Ni Cristo).

Paul is a BS Accountancy student at the Northwestern University. He works for CBAA Biznews and  The Blog of Innocence: SilentVoice Points. He is the College Editors Guild of the Philippines-Ilocos Chairperson. CEGP is the oldest and broadest intercollegiate alliance of student publications in the Asia-Pacific.

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