#Eleksyon2016: Tax reform

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The current Administration wears its savings like a badge of honor: look at how much money we’ve made, look at how much in taxes we’ve collected!

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And yet matuwid-na-daan has done this by being blind to the fact of social class and socialized earnings. It has done this by placing the manang who owns a tiny sari-sari store on the same level as a start-up entrepreneur, it has done this by treating the freelance cultural worker like a doctor or lawyer with his own practice. These categories are so different from each other – especially when it comes to earnings and benefits – that to even speak of them in the same breath is an injustice.

But of course matuwid-na-daan’s BIR does not care about that. They insist they’re not corrupt. But they sure don’t care about being unjust.

Roxas: tax reform as pa-pogi
I’m not sure where Mar Roxas comes from when he says that a discussion and/or a promise about tax reform will just be a way for candidates to gain pogi points. For one thing, this is an important election issue because it affects every citizen, even that little street kid who buys a piece of candy from the few pesos a stranger gives him.

Lest we forget though, the first response of Roxas to the tax reform question was: “What are the programs that will be sacrificed [if income taxes are reduced]? How many youths will not have their classrooms? How many of our countrymen will not benefit from PhilHealth? How many will be slashed from the 4Ps?” (The Manila Times, 30 Sept 2015)

But this is beside the point, isn’t it? The question is how many freelance workers and contractual cultural workers does it take to fund these programs; and how many corporations or – I don’t know, malls? – does it take to fund just as many projects?

When Roxas had time to think beyond sarcasm, he then made his pa-pogi statement: “Obviously all tax measures should be subject to review. I just don’t think it is wise to review tax measures in the heat of the political atmosphere of an election.” (Philippine Star, 2 Oct 2015)

But why? Right now is the best time to review tax measures, and most especially to assess what it is matuwid-na-daan did wrong, how exactly it was able to milk all it could from lower income earners, from contractual and freelance workers, from even marginal income earners, by insisting that everyone issue receipts and file taxes, no matter how little they earn, no matter how unstable their sources of income.

Matuwid-na-daan never promised it would be kind or compassionate. This is the most crooked straight path there is.

Binay: socialized taxes
At yesterday’s proclamation rally, Vice President Jejomar Binay mentioned how his government would deal with the crisis of taxes that matuwid-na-daan has gotten us into: “Kung ako na ang pangulo ng Pilipinas, aalisin natin ang income tax ng mga kababayan natin na kumikita kada buwan ng thirty thousand pesos at pababa.” (Politiko, 9 Feb)

Contrary to the kind of disbelief I’ve seen online with regards this measure – an anti-Binay bias for sure – the VP comes from a place of knowing how it actually works for the economy when taxes are imposed with kindness and understanding. A look at how the taxes work in Makati reveal exemptions for people who earn P50,000 pesos or less a year; the taxes go up in very small increments depending on one’s income bracket.

But also, there is nothing about what the VP has said that is surprising. In fact, so many laws are already in place precisely to protect the low income and minimum wage earners, the marginal income earners and freelance workers, but matuwid-na-daan’s BIR has decided to override these laws and collect from us by insisting that everyone have receipts in order to make any money at all.

And certainly we must agree with the VP when he says that there is something fundamentally wrong with tax collection, when it is lost to smuggling, and especially when it is lost to inefficient collection. That goes without saying.

Poe: tax rebracketing
Senator Grace Poe is for tax reform as well, this time focusing on changing the bracketing scheme that makes a teacher who earns P18,000 pesos a month, pay P14,000 pesos in annual taxes. (Philippine Daily Inquirer, 28 Nov 2015)

The tax bracketing system has not been changed since 1997, even as salaries have been adjusted relative to inflation. This means that all earners are now in higher brackets, even when the value of their money relative to the price of goods, remains the same. For Poe, whatever a wage or salary worker is able to save from taxes, will be brought back into the economy anyway, via spending.

Senator Poe has also highlighted the fact that the Philippines imposes one of the highest taxes, something that to her is problematic given Asean integration: “We have to be able to compete globally and make it enticing for investors to set up businesses here. Why would they want to do that if they have to pay a higher corporate income tax but with the less-than-ideal infrastructure that we can offer them?” (Interaksyon, 3 Dec 2015)

Tax amnesty, kinder taxes
But I’m not even thinking investors – foreigners should be taxed to do business in this country. If they refuse, then they’re not worth it.

But Filipinos who work their asses off, minimum wage earners, salaried workers, teachers and salesgirls, freelance writers and cultural workers, sari-sari store owners and turo-turo owners, these are the ones who should not have to deal with paying more taxes than they already do pay, given VAT on all products (thanks to Ralph Recto!). After all, these are workers who do not have health benefits or social security, and whose savings will just go to these needs later on – why deprive them of that?

Sure, it needs to be more nuanced. Some freelancers earn more than others. But wouldn’t it be kinder to declare a tax amnesty before you start taxing people arbitrarily, forcing them to pay past taxes and penalties, and presuming that everyone will have the excess money to pay up, just like that?

This administration apparently thinks this of all of us. Matuwid-na-daan never promised kindness or compassion or understanding after all. Certainly it did not promise justice.

This is the most crooked straight path there is.

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7 Comments

  1. Truly, lets dump Liberal Party esp. roxas into muddy canal or estero or sa kangkungan. para malaman ng mga taga liberal party kung anong klase may utak sila. utak thiefs…
    we will vote MDS-BBM for this election. they are the most qualified and well experience .

  2. In the Good Book, the last paragraph of the Book of Hosea:

    “The wicked cannot walk a path of righteousness because they will be destroyed”….ibig sabihin kapag nagpapanggap ang masamang tao tapos hindi pala tuwid na daan ang ayos at trabaho at nagpapanggap lang….gonna be destroyed ang kapalit noon.

    Coming from the Lord himself. Kaya ingat kapag gamit ng mga hindi naiintindihan na Biblical admonitions.

    In an interview with TV 5 anchor Luchi Valdez who casually implied to Mar: “Yung tuwid na daan ninyo ay parang brand lang sa political campaigning ano?”

    To which Mar first snickered then replied with a forgettable retort, allowing the barb to punch through and reveal himself for what “tuwid na daan” really means.

    Not even defending what “tuwdi na daan” really means–a righteous path of the Lord. Who says state and the Word of God are separate? Probably the administration…

  3. Let us base our taxes from the consumer price index and rate of inflation. Workers that earn 10,000 ten years ago is different than workers earning 10,000 today because the value of the pesos decreases per year due to inflation and various other factors. But the rate we pay for our taxes are still the same. That simply means we are over tax. Pinoy and his buddies refused to acknowledge this because this will decrease the BIR collects from us. Government gets rich, we became poor. Imagine being taxed 32 percent on wages amounting to 30,000 pesos. Remember, these people are intelligent, they know this for a fact but they just want the government to get rich.

  4. isa sa mga dapat talaga gawan na ng paraan is yung tax ng bansa, masyao nang malaki na parang wala naman pinupuntahan ang tax. sana naman kung si grace poe na ang magiging presidente, magawan na niya ng paraan ito.

  5. Nonsence Beenay on

    Don’t forget that Binay will promise all the impossible things for political reasons. He will do his best to win the presidency to save his family from all the corruption charges against them and release the corrupt senators like Enrile, Revilla, Estrada and Napoles from prison. Why is it so hard for the Binay family to explain to the whole world how they obtained billions of pesos or dollars deposited in Canada? Let us keep praying to save the Philippines from the corrupt Binay family.

  6. Like the columnist, we always listen to politicians who say what we want to hear and what benefits we will get if they are elected. However, they never explain where they will get the lost revenue and talk as if we have plenty of surplus in our P3.02 billion which does not include salary and SS benefit increases for many. They claim they’ll get the lost revenue from improved collection and stop smuggling. The Phil Navy and Coast Guard tries their best but the resources we have to curtail smuggling are simply inadequate.
    Let the politicians say what they will add or deduct to the budget to improve infrastructure, provide salary increases, more help for the poor, etc. and where will they get the money.