• Shifting the tax burden to factory workers

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    Now, that’s ridiculous. Schoolteachers are paying more taxes than doctors and lawyers? Secretary Kim Henares of the Bureau of Internal Revenue (BIR) says so, and we don’t have any reason to doubt her.

    A schoolteacher, who sells tinapa and daeng on the side to make ends meet, coughs out P35,952 in taxes on a salary of P258,000 a year, while self-employed professionals such as doctors, lawyers, and engineers get away with P5,764 in payment, on the average.

    How much do these professionals make?

    The country has 1.7 million professionals of all kinds and stripes. But to illustrate the point, let’s focus on a doctor. A doctor charges P500 per consultation, minimum. At an average of ten patients a day, that’s P5,000. If you multiply that by 22 [assuming the doctor only holds clinic for that number of days], that’s P110,000 a month, or P1.32 million a year. Now, these are general practitioners. A specialist, say on cardiovascular disease, would set a patient back by a few hundred thousand pesos per operation.

    Of course, they don’t declare that income..

    The BIR tells us that one accountant in Makati—where accountants normally make millions of pesos a year—paid P120 the previous year. What gumption! But wait, one doctor had the iron nerve to fork over P82.50

    According to Henares these professionals should pay at least P100,000 each, given their income levels. The fact that they don/t means the government is losing P100 billion a year.

    Forget schoolteachers. Geez, at that rate, factory workers pay more taxes than professionals. And their children have to make do with instant noodles for breakfast.

    We support the so-called shame campaign the BIR is undertaking. But the agency shouldn’t pick on doctors, lawyers, and engineers alone. After all, a hundred thousand pesos a month or thereabouts is just enough to live a decent life. Sure, the agency should run after these people and get them to share the burden. They should carry their own weight, you know.

    The full brunt of the campaign should be directed against those taipans, who year in and year out land in Forbes 500’s list of wealthiest individuals. They do pay a million pesos or two, but they make hundreds of billions, for heaven’s sake!

    At least the taipans deign to pay, ridiculously low though the amount may be. That cannot be said of more than half of the members of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. These naturalized citizens who become wealthy in the country that opens its doors to them do not have a tax identification number, which means they do not pay any tax at all.

    Well, that’s what the gist of the speech President Benigno Aquino 3rd delivered before the group at their induction of officers recently.

    In a television talk show the other day, a member of the Philippine Medical Association remarked that maybe people evade the responsibility because they hate the thought of their taxes going into the pocket of dishonest politicians.

    It certainly sounded like an excuse to shirk one’s obligation, but that did not make the observation any less true. It is hard for people to feel patriotic seeing their elected representatives appropriate for themselves what they earn from the sweat of their brow. That drives some people to join the rebels.

    In the old days a senator or a congressman demanded a commission, usually 20 percent to 30 percent of the total cost of the project financed with his pork barrel allocation. That used to outrage people, but at least there was an actual project, although substandard.

    Soon the legislator gets tired of going through the motion. After all, identifying the project and seeing it through its completion is too unwieldy and time-consuming, so he drops all pretext. He thinks up of a project, say assistance to marginal farmers or fishermen, but the project exists only on paper.

    For that scheme, the legislator needs a non-government organization (NGO) to serve as conduit to receive government funds. He also needs it to take care of the paperwork, say forging the signatures of the supposed recipients, of fertilizers and pesticides in the case of farmers or boats and nets in the case of fishermen.

    The new practice is admirable in its simplicity—and audacity. There is no project, the NGO is fake, and the signatures are forged. The honorable senator or congressman gets to pocket the entire cost of the project, usually in the tens of millions of pesos.

    This is no longer graft and corruption but outright thievery. How lucrative is it could be gleaned from allegations that Janet Lim Napoles, owner of JLN Group of Companies, was able to funnel Priority Development Assistance Fund worth P10 billion to NGOs she herself had set up.

    According to three of her former employees and confidantes, three senators, Juan
    Ponce Enrile, Jingoy Estrada, Ramon Revilla Jr., and Vicente Sotto III, signed over their PDAF allocations to the NGOs. There are also 28 congressmen identified to have been involved in the same scheme.

    Here we’re talking of only a handful of legislators. It is feared that there are more senators and congressmen out there who have signed over their PDAF allocations to NGOs of dubious provenance

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    1 Comment

    1. kim henares is an i..ot. best thing is to get rid of income tax, and just increase and concentrate on VAT. chasing 1 million taxpayers is way better than chasing millions of professionals. if VAT is collected correctly on 90% of transactions, this would be a great accomplishment. better VAT collection is also useful in tracking smuggling.