False prosperity seen next year during polls
DOUBLE TAXATION: Imagine a number of gasoline pumps running dry at a time when people are scurrying to meet Christmas with hope and cheer.
A fuel shortage may just hit us if the Bureau of Customs makes good its threat to seize and auction off $400-million worth of importations by Pilipinas Shell to force payment of supposed deficiencies in excise taxes on raw materials brought in by the oil giant.
Protesting what it said was double taxation, Shell claims that it already paid billions in excise taxes after the Catalytic Cracked Gasoline and Light Catalytic Cracked Gasoline it had imported for making unleaded gasoline were processed and withdrawn from its Batangas refinery.
(Pahabol: A lawyer in the Court of Tax Appeals, where Shell has turned for relief, informed us that the court has issued a temporary restraining order [TRO] preventing Customs from seizing Shell shipments.)
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FUEL SHORTAGE: Shell, which supplies 30 percent of gasoline in the market, is disputing a P7.3-billion tax assessment by Customs covering its CCG and LCCG importations from 2004 to 2009.
It cites Bureau of Internal Revenue rulings dating back to 2004 that the importation is not subject to excise tax. Even the Department of Energy seems to agree that the CCG and LCCG are indeed raw materials.
But Customs disagrees. Faced with another collection shortfall this year, it has slapped Shell with the deficiency tax assessment. Customs seems to know the Tax Code better than the BIR and know about oil products better than the DoE.
Shell said seizure of its raw materials could stop work in its refinery and result in a huge supply shortage just when fuel demand is expected to rise this month.
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ETERNAL OPTIMISTS: But whatever shortages loom, half of Filipinos — the eternal optimists — will tell you that this Christmas will not be any worse than last year’s. In fact, most of them look forward to the coming year with hope.
The latest (Oct. 22 – 30) survey of Pulse Asia shows that 49 percent of the population expects the coming Christmas to be as merry as that of last year. In Eastern Visayas and Region 11, most people even see a more jolly Yuletide this time!
The optimism is made more manifest by the finding that a huge majority of Filipinos (86 percent) face 2010 with hope. Most Filipinos across all geographic areas and socio-economic classes (80-90 percent) look forward to a better new year.
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THE UNDERGROUND: Amid the economic difficulties here and there, some factors help lighten the burden.
For whatever reason, and whoever takes credit, the financial crisis that brought down the biggest economies of the West apparently did not inflict comparable damage on the Philippine economy.
Like ants incessantly eking out a living underground, most Filipinos choose to ignore the economic impediments of bad government, and continue to labor outside official regulations.
Licensing, rules and their concomitant fees and taxes are widely ignored. This results in shortfalls in internal revenue collections and levies by the local units, but puts more money in plain folks’ pockets and enough food on their plates.
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TAX AVOIDANCE: Overall, my guess is that the underground economy accounts for 60 percent of the true gross domestic product. I dare say that official reports do not paint the correct total picture. Much of it is extrapolation and guesswork.
It is curious, and maybe alarming, but tax evasion (or avoidance) actually adds to the seeming improvement in the net earnings of many low-income Filipinos.
For example, while the non-payment by consumers of the hated 12-percent Value-added Tax may mean less revenue for the government, it stretches the consumer peso and boosts the spending power of many Filipinos.
This may be a criminal practice, but harassed taxpayers find it easy rationalizing the avoidance of levies of a corrupt and inept government. A few radical ones even consider tax avoidance patriotic.
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FALSE PROSPERITY: The survey respondents did not say it, but the hopefulness of 86 percent of Filipinos for next year may be attributed in part to the holding of the May elections that will see at least P100 billion being pumped into the money stream.
Funds that have been saved, borrowed, extorted or stolen — mostly by officials and their cohorts — will be transfused back into the country’s circulatory system. Parties, candidates and their supporters will cough up the dough.
The false prosperity will be felt not only in the Commission on Elections but also throughout all sectors that stay alert for windfalls.
Even priests and preachers may be heard advising voters to accept the money being doled out by the candidates without compromising their conscience and their choices.
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PLEASE BE FAIR: Leila M. de Lima, chair of the Commission on Human Rights, emailed Postscript to take exception to observations that the CHR and its foreign collaborators seem to apply double standards in assailing human rights violations.
It has been noted that the CHR reacts fast and furiously when agents of the government trifle with human rights, but is slow and soft when kidnappers, bandits, rebels and radical elements violate the rights of fellow civilians.
This observation does not pertain only to the action taken by the CHR and its foreign guests related to the Nov. 23 Maguindanao massacre but also to other high-profile violent incidents where the perpetrators were not from government.
The CHR must do something about its obvious partiality. It may also want to advise its foreign collaborators that a little more fairness may be good for everybody.