POSTSCRIPT / March 18, 1999 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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People have the right not to pay unjust taxes

INCOME tax time is again upon us, its nauseating presence groping us like the sweaty hands of a humid summer day.

If only in self-defense, we raise the usual complaints about taxes as we are bombarded by reminders about paying up.

One of our pet peeves is the community tax, commonly called the cedula.

More than a century after Katipunan supremo Andres Bonifacio and his fellow anak ng bayan tore their cedulas to dramatize their defiance of the oppressive Spanish government, the hated cedula is still every much around. Why?

The only plausible purpose for imposing the cedula is to raise money for the government. Mahirap kasing magpalaki ng mga buwaya.

While raising money via taxation is a legitimate exercise of state powers, the government cannot impose just any tax that its imaginative fund-raisers fancy. Taxes have to be fair. Citizens, in fact, have the right not to pay oppressive taxes.

* * *

AS we keep pointing out every chance we get, the cedula tax is a flagrant case of double taxation. The government should stop collecting it.

The tax we pay when we secure a community tax certificate or cedula is based on our income (P1 tax for every P1,000 income) and earnings from real property (also P1 for every P1,000).

But note that income from employment, business and real property have already been taxed. You have paid (or will soon pay) your income tax as well the taxes on your real property. Why again pay taxes on them?

We see this as a case of double taxation. If I were a lawyer, I would file a test case.

The clerk issuing the cedula does not verify your income and real property declaration, which is not made under oath. You may claim zero income or give arbitrary amounts – and you still get your cedula. And the government gets your money without question.

The government is not interested in the accuracy of your declaration, because its only interest is to collect more and more money. Any amount will do, since the cedula tax is only a double imposition anyway.

The late Manila Mayor Antonio J. Villegas once raised this interesting legal point. But the cedula is still very much around.

* * *

THE cedula is not, and cannot be, a means of identification as its apologists sometimes point out. You can buy a dozen cedulas each with a different name. Lend a name to your pet dog and you can get him a cedula.

Yet, the cedula number is often required to be indicated on legal documents.

Anybody executing an affidavit is familiar with the lower portion saying that Affiant So and So appeared before the notary public exhibiting his cedula with number such and such. Why do we allow such inanities?

In this country, even the dead can execute an affidavit complete with cedula numbers, signatures and official stamps.

Many people don’t bother to get cedulas. They just concoct any number for the blank asking for their community tax certificate number. The bored notary public validates the document anyway.

* * *

THIS anomaly is similar to the practice of kamikaze drivers of buses and other utility vehicles of carrying several driver’s licenses under different names (but with their own pictures).

The confiscation of their license (in exchange for a traffic violation receipt) is a daily hazard for these drivers. The offending driver who goes through the regular procedure would spend at least a week trying to recover his license.

During that time of locating and redeeming his hostaged license, this breadwinner does not earn anything. That explains the need for several licenses and some grease money on the ready.

Others go beyond that. A driver can buy a traffic violation receipt filled up to make it appear that his license had been taken by a traffic deputy investigating an accident involving the driver.

When accosted for a new violation, the driver simply scratches his head and shows his spurious violation receipt – but never his genuine license safely tucked in his wallet.

Traffic authorities are fully aware of this, but why should they crack down on the perpetrators when the practice makes everybody happy?

* * *

STILL on taxes, another of my favorite line is that the family residence should not be subjected to the usual tax on lands and buildings, but granted full exemption. Maybe a compromise would be a token tax of 1/10 of one percent of assessed value and not three percent as imposed in some localities.

A family should be allowed to declare one family residence, which would then be granted written exemption from realty taxes. All other houses and realty holdings of that family would continue to be taxed at the regular rate.

The home is the refuge of the family struggling in this often-hostile environment. The state should protect the family residence not only from criminal elements but also from undue impositions by the government itself.

It’s sad, but many families have lost their only home and refuge just because they could not afford to pay the realty taxes on it compounded by penalties and interests.

The government is unable to provide basic shelter to millions of Filipino families eking out a living under harsh working conditions. Yet, it has the nerve to swoop down on those who have family dwellings all right but not the means to pay fully and promptly the tax on their houses.

If Erap Estrada is truly for the mahihirap, he should look into this.

* * *

HAVE you noticed that in some restaurants there is no more Value Added Tax (VAT) added to the bill?

Don’t be deceived. That pahirap of a tax is still there. It has simply been built into the bill so the customer is led to think that there’s no more VAT on restaurant food under the mahErap administration.

They should restore that line on receipts indicating how much VAT has been added to the bill.

First reason is that people should be made tax-conscious (as the government should also be conscious of what it is exacting from the people). Citizens should not be lulled into thinking that they are getting away with not paying taxes.

Secondly, many people want to check if the tax being imposed was properly computed. Are we customers being overtaxed through the wrong computation of VAT?

* * *

PARDON us, but we’re under the impression that VAT is a tax on the Value Added. Let us explain.

If you buy a bun, a beef patty and some ingredients at a total cost of P10 and go to your kitchen to prepare a hamburger that would sell for P15, you added in effect a value of P5 to your bun, patty, etc.

The Value Added to the ingredients through your kitchen preparation is P5. The original items costing P10 became more valuable by P5.

The VAT or Value Added Tax is 10 percent. The 10 percent, we believe, should be computed based on the Value Added. In this case, 10 percent of P5 (the value added) is 50 centavos – which we believe is the correct VAT on the hamburger when it is sold for P15.

The price of the hamburger in our example should then be P15 plus 50 centavos as VAT, or a total of P15.50.

* * *

BUT when food stores compute the VAT, they tack the 10-percent tax on the total price of P15, which comes down to P1.50. The total price then becomes P15 plus P1.50 VAT, for a total of P16.50.

There is a one-peso discrepancy in the two differing computation of VAT on a P15 hamburger.

We’ve been told that shop owners simply add 10 percent of the price to represent VAT because it is easier to compute it that way. But convenience is never an excuse for using a wrong base for computing VAT.

Will some expert please clarify this point for us consumers? Not that one devalued peso as additional VAT is a matter of life and death. This taxpayer just wants to know how things should be.

With VAT on food now hidden from scrutiny, there is no way customers can check if they are being cheated. Even the BIR, if it does not watch out, will end up being cheated of taxes collected in its name.

* * *

ONE other thing that the BIR can do to encourage citizens to step forward and pay the correct tax on their correct income is to publish the incomes and taxes paid by all top officials for the past five years.

The list should include the President, down to his Cabinet, members of Congress, Supreme Court justices, generals and colonels in the armed forces and superintendents in the Philippine National Police, and officers of government-controlled corporations.

While they are at it, the government should also publish the summarized statements of assets and liabilities of the same top officials from the time they joined the government.

We keep talking of transparency and we keep harassing the population for more taxes, but we do nothing to ensure that taxes are not stolen or that the cost of graft in the bureaucracy is lowered to “tolerable” (a debatable term) levels.

* * *

(First published in the Philippine STAR of March 18, 1999)

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