COLUMN Val G. Abelgas On Distant Shore – Why Bleed the Poor with Taxes?




BENIGNO S. Aquino III was elected to the presidency largely on the promise to lift the people from poverty by curbing corruption and on the perception that his administration would be pro-poor. The President, in fact, casually refers to the people as his “bosses.” And yet, recent actions by his administration tend to show the opposite – that he doesn’t care at all about the interests of the common people.
Just recently, the Bureau of Customs raised the customs clearing fees imposed on 40-foot containers carrying balikbayan boxes by P40,000 effective August 1 and another P60,000 effective October 1, which would bring the total fees from the previous P80,000 to P180,000 per 40-foot container, the size of choice of many balikbayan box forwarders.
While Commissioner Bert Lina insists that the fee is being charged to balikbayan box forwarders, we all know that most of these added costs would be passed on to the balikbayan box senders in the form of increased prices per box. The poor overseas Filipino workers, who ironically have been hailed as “modern day heroes” by this hypocritical administration, and other overseas Filipinos who send $25 billion in foreign remittances annually to boost the Philippine economy must now dole out an additional $5 to $10 per balikbayan box that they send to their loved ones in the Philippines.

Lina insists there is no additional tax on the contents of the balikbayan boxes. But what would you call the additional fees if they were not taxes? If they go to government coffers, by any other name those fees are taxes imposed on the hapless OFWs and the struggling balikbayan box forwarders. If they go elsewhere other than government coffers, that’s another story.

In addition to the increased fees, Lina initially ordered 100-percent examination of the balikbayan boxes to curb smuggling through the boxes. But President Aquino had to stop him from enforcing this following outrage by OFWs expressed in social media. Lina was targeting additional collections of P600 million in customs duties from these balikbayan box items beyond the P10,000 value exempted from taxation, an amount set during the time of President Marcos when the peso-dollar exchange rate was probably just P20 to $1.

The question being asked by the OFWs and lawmakers is why target the lowly OFWs for additional revenues for the government and turn a blind eye on the people who smuggle, almost casually and on a daily basis, highly taxable items such as oil, rice, used cars, corn, sugar, garlic, cigarettes and almost everything else?

The same question may be asked of the administration’s recent tax initiative that seeks to increase the Value Added Tax on goods from 12 to 14 percent. The VAT is the equivalent of the sales tax in other countries and even the existing 12 percent VAT is already higher than those imposed in any state in the United States!

Malacanang said it would seek the 2-percent VAT increase if Congress passes a measure that would lower income tax rates. The legislation aims to lower the tax rates to make up for the erosion of the people’s income through the years because of inflation. The Palace was objecting to the lower income tax measure because, it said, it would result in loss of government revenues of P30 billion annually.

But, as correctly pointed out by administration ally Rep. Miro Quimbo, chairman of the House ways and means committee, why is the administration complaining about a P30-billion loss when it has not spent P500 billion of the appropriated budget this year? “So what is the impact of the P30 billion that it is talking about?” Quimbo asked.

Aquino’s allies in Congress must be so frustrated with the administration’s hypocrisy that they are now speaking out their mind. House Speaker Sonny Belmonte, who has in recent months shown his independence, said Congress would push the measure that calls for the lowering of income tax rates from 32 percent to 25 percent to increase the purchasing power of Filipinos.

Isabela Rep. Rodolfo Albano lll and Pasig City Rep. Roman Romulo also opposed the DOF’s proposal for a VAT increase.
“The rich would not mind a two-percentage-point increase in VAT. It is the middle class, employees and the poor who will suffer,” Albano said.
“Increasing VAT to 14 percent will be an added burden to the working class, especially to the poor, which comprises the bigger chunk of society since it will mean corresponding increases in the cost of goods and services,” Romulo added.
Just as the freight forwarders would pass on the customs fees to the OFWs, the producers and service providers would only pass on the added VAT costs to customers. “That is why there is a VAT portion in your monthly electricity bill or mobile phone bill,” Romulo said.
Quimbo also noted that salary wage earners are 100-percent compliant of tax payments while highly paid professionals such as doctors, lawyers and engineers are only 40-percent compliant, while only 31 percent of business owners are paying taxes.

Under the House proposal, corporations and executives earning P10 million and above would be taxed 33 percent in individual income and corporate taxes but they would be given tax incentives for safety nets.
Why is Malacanang opposing such an equitable proposal? Why target the poor – Aquino’s alleged bosses — and be lenient on the wealthy?
If Aquino were really serious about his “kung walang corrupt, walang mahirap” campaign slogan – that’s what it really is – and his “daang matuwid” policy, how come government losses from smuggling, tax evasion and other corrupt activities have increased many times over during his tenure than in the previous administrations?
Why is this government so driven to increase revenues at this time? Why does it want to bleed the poor when it cannot even spend the hundreds of billions appropriated by Congress to spur economic growth and hopefully give more and better-paying jobs to Filipinos? Why squeeze the poor dry and yet let smugglers and tax evaders go unchecked? Aquino’s “bosses” are waiting for answers.


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