Latest Stories


Inability to tax the rich blamed for income gap


Albay Gov. Joey Salceda. INQUIRER FILE PHOTO

LEGAZPI CITY, Philippines—“The biggest failure of the Philippines as a nation-state is its inability to tax the rich,” former Arroyo economic adviser and Albay Gov. Joey Salceda said, adding that disparity in the income growth rate between the rich and  poor would persist unless government initiated drastic measures to collect taxes from the rich.

Salceda cited a National Statistical Coordination Board (NSCB) study that showed how income growth among the high-income class tended to be faster compared to that of the middle- and low-income classes because of the government’s failure to tax the wealthy.


Wide income gap

According to the NSCB report, the high-income class posted a 10.9-percent income growth rate in 2011 against the 4.3-percent income growth rate among the middle-income class.

“The inability of the state to tax the rich is the principal cause of the wide income gap between the rich and the poor,” said Salceda.

The former economic adviser stressed that consumers, especially overseas Filipino workers and employees, most of whom compose the middle class, get much of the pain in the reformed value-added tax (RVAT) and the higher sin taxes. The RVAT was enacted during the Arroyo administration.

“The rich always run away with the money since they enjoy tax exemptions, lower tax rates or have tax lawyers to fight the Bureau of Internal Revenue,” Salceda said.

He added that the trend (of an increasing gap in growth rate between the rich and the poor) confirmed an analysis by Forbes, a leading source of financial information, that the wealth of the country’s top 40 corporations accounted for 76 percent of the country’s nominal gross domestic product (GDP).

Three-fifths of GNI

Since the high-income class comprised only about 15 percent of the total population, Salceda said its share of the gross national income (GNI) is about three-fifths.

The NSCB study on the per capita income by income class in 2010-2011 showed that among the upper income class, the growth by GDP stood at 10.9 percent, GNI at 9.9 percent, and net disposable income (NDI) at 10.6 percent.

In contrast, the growth in the middle-income group was 4.3 percent by GDP, and 3.4 percent and 4.1 percent, respectively for GNI and NDI.

Salceda said the government’s failure to collect taxes from the rich could result in the loss of billions of pesos in potential tax revenues. He added that should the government turn serious in collecting these taxes from the rich, the state would be earning an estimated P320 billion in tax revenues, more than enough to finance government expenses.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Other Stories:

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

  • http://www.pulisnapogi.blogspot.com/ Pulis Na Pogi

    That’s the reason why we need to kill all the lawyers!


Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Napoles surgery in Makati hospital successful
  • Save the queen? Aide takes fall for Enrile, Gigi Reyes
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • A first in a mall: Authentic Greek yogurt–made fresh in front of diners
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Banks allowed to use ‘cloud’
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Believe it or not: Filipinos love US more than Yanks
  • Marketplace