Right hand offers amnesty as the left slaps more taxes
AMNESTY & REFUND: President Arroyo certified yesterday as urgent House Bill No. 2933 seeking to grant a one-time amnesty on unpaid income taxes.
The idea is ostensibly to raise revenue fast and give delinquent taxpayers a chance to restart with a clean slate. Intended or not, an amnesty will also help cushion the impact of new and heavier taxes.
While they are on taxing mode, lawmakers must insert, in fairness, a proviso that will compel the Bureau of Internal Revenue to refund promptly excess income tax payments and deductions.
The payback clause should (1) set a strict deadline for refunds and (2) order the BIR to pay interest whenever it fails to pay refunds within the deadline.
Taxpayers are penalized with a hefty surcharge when they fail to pay on time. It is only fair that the BIR also pays a penalty (interest) when it fails to refund excess payments promptly.
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DISTRESSING FIGURES: After the government’s gloved right hand offers an amnesty, the mailed left hand will be flexed to inflict new and higher taxes to extract more blood from the impoverished population.
Look at these figures from Sen. Ralph Recto on the state of our GNP — Gutom na Pilipino — and weep.
The one-day per capita energy intake of the Filipino had decreased from 1,753 kilo calories in 1993 to 1,684 kacal in 2003. “The Filipino is eating less,” he said. “The amount of food he eats every day meets only 87 percent of the recommended nutrients.”
“The culprits are not Vicky Belo, Atkins or South Beach,” he quipped, referring to a local cosmetic surgeon and two leading slimming regimens, “but poverty.”
The latest government-commissioned Family Income and Expenditure Survey (FIES) showed that the share of food expenditure to total household expenditure is down to 42.6 percent.
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‘ULAM’ SUBSTITUTES: While incomes rose by 2.5 percent from 2000 to 2003, prices increased by almost 14 percent. As Recto noted, we do not need statistics to tell us that. Going to the nearest sari-sari store is enough.
To make both ends meet, Filipinos have adopted what Recto has described as the “Top Ten Ulam Substitutes” — toyo , coffee, oil, salt, brown sugar, bagoong , condensed milk, powdered milk, soft drinks and powdered chocolate drinks.
This list of substitute “main course” was culled from a survey conducted last year in Metro Manila for the Progress Report on the Millennium Development Goal.
The result of this “voluntary national dieting,” he said, appears on “weighing scales and on the emaciated faces” of children.
Recto said, “There is nothing more to exact from a people already surviving on noodles - the pambansang pagkain .”
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GOLLUM GEN: Studies have shown that three in every 10 children in the 1-5-year age bracket are underweight and underheight.
“We are raising a generation of Gollums,” he said, referring to the Lord of the Rings character with famished face and skeletal frame.
“If families are skipping a meal so they can send a child to school, how can we in government in conscience hit them with a P75-billion power bill plus P80 billion in new taxes?” he asked.
The FIES showed the inequity in income distribution. “It is the real fiscal road map as it identifies sectors that can absorb higher taxes,” he added.
He and other senators have suggested that a bigger share in the burden can be assigned to the more affluent sectors.
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POVERTY PICTURE: In 2003, the richest 10 percent of families earned P876.3 billion (or 36.8 percent of total family income of P2.38 trillion) while the poorest 10 percent earned only P42.3 billion (or 1.8 percent).
“The bottom 30 percent poor partook a measly 8.4 percent of the national income while the upper 30 percent buena familias gobbled up 65.2 percent of the total pie,” he said.
“The bottom 30 percent have no savings, in fact, they have utang ,” the senator said. “So if we impose taxes, their indebtedness would worsen. It will be like wringing blood out of stone.”
He added: “Total family savings in 2003 was P330 billion, so if we will impose the P155-billion pain package, it would wipe out nearly half of family savings. If we include the billions more that they would have to shell out as a result of prices of goods increasing due to power and tax rates increase, then only a few will be left.”
“This poverty picture should be factored in the revenue program. We must give a human dimension to the fiscal program if we are true to our calling of ‘Putting People First,’ “ he said.
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TAXES & ELECTRICITY: Sen. Mar Roxas, chairman of the Senate committees on economic affairs and on trade and commerce, said exacting more taxes and following up with a second increase in National Power Corp. (Napocor) rates would take away P153 billion from consumers.
The government aims to collect P83.4 billion from eight new tax measures certified by Malacanang to Congress as urgent.
In addition, households and industries will spend P35 billion more for electricity as a result of the recent 98-centavo-per-kilowatt-hour increase in Napocor rates. A second rate increase of the same amount will draw out another P35 billion from consumers.
National Economic and Development Authority officials have testified in the Senate that the P83.4-billion in new tax revenues would not lead to any “net new government spending” since it will simply be used to pay the public debt.
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DAMPENING EFFECT: The manner the new money is raised and used could dampen economic growth in the short term, according to Roxas.
“Offhand, there is valid concern that the P153 billion that will be extracted from consumers could erode disposable income and significantly inhibit (consumer) spending,” he said. “This, in turn, could harm local industries.”
He added: “Considering we now have the second costliest electricity in Asia, there are concerns about how higher power rates will impact industries, including exporters that cannot take full advantage of time-in-use discounts because they operate 24 hours a day, seven days a week.”
But NEDA officials said the new taxes and higher power rates would have a positive impact on long-term Gross Domestic Product growth since they would help government, the country’s single biggest consumer, cope with its own financial problems.
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HOUSEKEEPING: The Report 2157 that we cited last Sunday concerning the importation of used vans and their conversion at the Subic Freeport was not from the Senate but from the House committee on transportation and communications and the committee on trade and industry.
The report said that no law is violated by bringing right-hand-drive vehicles into the economic zone and converting them there to left-hand drive. The report added that the converted vehicles may be lawfully driven anywhere in the Philippines as long as proper taxes and duties are paid and all tests and requirements on roadworthiness and safety and environmental compliance have been passed and duly certified.
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