Philippine Government Seeking Tax Evasion Reports via Facebook, Twitter

The Philippines is turning to Facebook and Twitter in its campaign to track down tax cheats and meet President Benigno Aquino’s pledge to boost revenue, several finance officials said today.

“People are posting complaints in my Facebook and we’re using that,” Internal Revenue Commissioner Kim Henares said today in an interview.

The government is resorting to the social networking sites to help boost collection after tax revenue fell to 12.8 percent of gross domestic product in 2009 from a record 17 percent in 1997. The goal is to raise collection to 15 percent of GDP within one year without new or higher taxes, Henares said.

“It will keep people in check,” said Jonathan Ravelas, market strategist at Banco de Oro Unibank Inc. in Manila. “It won’t have an immediate impact but it will be effective over time.”

Finance Secretary Cesar Purisima and Energy Secretary Rene Almendras, who were attending mass at the Manila Cathedral with Henares and Aquino, said officials hoped to make use of the sites’ popularity in the country. The Philippines has 14.6 million Facebook users, making it the eighth largest market for the site, according to Checkfacebook.com, which tracks data on Facebook Inc. advertising.

The Philippines is the fourth worst at tax collection of the more than 100 countries ranked by Fitch Ratings. The only countries with lower tax revenue-to-GDP ratios are Guatemala, the Dominican Republic and Costa Rica, Andrew Colquhoun, head of Asian sovereign ratings for Fitch, said in an interview today.

“This is a key rating weakness in the Philippines,” he said. “We remain convinced an enforcement effort can raise revenue.”

The Philippines ranks 139th out of 180 in Transparency International’s corruption perception index, tied with Pakistan and Bangladesh. Malaysia is 56th, while Thailand is 84th.

To contact the reporter on this story: Clarissa Batino in Manila at cbatino@bloomberg.net.

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