THE Liberal Party has been quick to discredit the proposals for tax reform, especially the proposal by Vice President Jejomar Binay to exempt low- to middle-income earners of P30,000 a month and below from paying income taxes.
But LP should also be worried about Senator Grace Poe’s proposal to reassess income brackets. After all, it just might prove as false all of matuwid-na-daan’s press releases about poverty alleviation. (Is it 1 million out of poverty, or 2 million? Mar Roxas himself was confused about the numbers in an interview with Mike Enriquez on radio.)
An income rebracketing would reveal that while government celebrates its numbers, in reality how much we earn has little value given the price of goods and services. A rebracketing would have repercussions on all the numbers this government trumpets: poverty, but also employment and unemployment rates, hunger and need, its dependence on OFW remittances. It would put into question whether or not those credit ratings actually matter to a majority of us at all.
The ruling LP spins tax reform
Marikina Congressman Romero Quimbo has been speaking for the Liberal Party, and says that the proposal to exempt low income earners from paying income tax would cut government tax revenues by half. As it is, according to Quimbo, only 7.8 million of 34 million workers are paying taxes. (Philippine Daily Inquirer, 11 Feb)
Also, as per LP’s numbers, VP Binay’s proposed tax exemption would get 6.66 million workers exempted from paying taxes, leaving only about 1.15 million workers paying taxes. (Philippine Daily Inquirer, 11 Feb)
As with Roxas, Quimbo equates income tax revenues with the construction of classrooms, the delivery of health services, the implementation of the conditional cash transfer (CCT) program, among other “public services” that our taxes supposedly fund. (Philippine Daily Inquirer, 11 Feb)
Quimbo, as with the rest of his Liberal Party, spins the proposal to reform taxes by making it seem like we all have no choice but to stick to matuwid-na-daan’s tax strategies. It spins tax reform by making it seem like this is the best we can do, and there’s no other government – no other president – that can do better. Other than of course Roxas, who thinks tax reform is all a matter of pa-pogi.
Taxes according to Matuwid-Na-Daan
There are many things unjust about the current system of tax collection that the Liberal Party celebrates, even when it asserts that these taxes make life better for nation.
For whom has this tax collection sacrificed? Has matuwid-na-daan followed the Constitution, when it declares that “The rule of taxation shall be uniform and equitable”? (Philippine Constitution, Article VI, Sec 28, (1))
Of course not.
Instead what it has done is change the ideological underpinnings of what the tax office is there for. BIR Chief Kim Henares said it herself: “We are changing ourselves from being primarily a customer service institution to a law enforcement institution.” (Reuters, 17 Nov 2014)
Under the President’s nose, Henares’s BIR unburdened itself with the task of serving the people, and focused instead on how to meet its revenue targets, and – apparently – how to instill fear.
Henares rationalizes: “If you look at the psyche of the Filipino, if you do not put fear in them they will not obey.” To which Budget Secretary Florencio Abad had said: “They <people>fear her, rightfully.”(Reuters, 17 Nov 2014)
But who fears Henares, and who fears the BIR? On matuwid-na-daan, who is beyond fear? And who has ended up paying taxes?
Hitting wrong targets, committing injustice
In 2012, BIR collection rose by 14.48%. That’s P1.057 trillion pesos. (GMANetwork.com, 18 Mar 2013) But Henares was unhappy about the 2012 collection, “complaining about the fact that only 400,000 self-employed professionals, or 24%, filed their income tax returns (ITRs) in 2012 with the biggest contributors to the BIR’s coffers being workers or those whose income taxes are withheld at source, and not the large taxpayers or even the so-called professionals.”(The Daily Tribune, 14 April 2014)
Henares had sought to target self-employed professionals – doctors, lawyers, accountants, engineers, real-estate brokers – those who hold licenses and who own their own practice or maintain their own offices, since she started as BIR Chief. Under the Tax Code, this can be done by requiring these professionals to issue receipts as proof of earnings.
But if 6.66 million workers are earning P30k or less a month (as the LP will have us believe), then that must mean tax revenue from doctors and engineers and lawyers make up a very small percentage of tax collections, yes?
So you wonder: who has ended up paying more taxes under matuwid-na-daan?
Low- and middle-income earners, that’s who. Including freelance contractual cultural workers who apparently fall under “self-employed professionals,” too, never mind that our earnings, our employment, our sources of income are farthest from a doctor’s or a lawyer’s.
But matuwid-na-daan’s BIR refuses to make this distinction. After all, the goal is collection; who cares if the small fish end up paying? And now that this government office has been allowed to denounce its function as a public service, it has every excuse not to listen.
I reiterate: only the blind and unthinking would think the freelance writer and production staff, the lighting designer and freelance actor, the visual artist and independent musician to be in the same league as doctors, lawyers, engineers as far as earnings are concerned. And yet we have been subjected by matuwid-na-daan to the same taxation processes as those who are self-employed, who own clinics and law offices, who own “businesses.”
This is one of the many reasons why we need tax reform.
This is one of the many reasons why I campaign against the Liberal Party. Because on this matuwid-na-daan, so many of us are being robbed of our hard-earned cash, get nothing by way of benefits, and get little (if at all) by way of public services.
On this matuwid-na-daan, taxes are about law enforcement. It is not about kindness or compassion, and it is done without nuance, and without justice.
Now why would anyone want another six years of that.