Absurd tax exemption bills

In this season of giving, some congressmen are offering gifts to people who neither asked for nor need them, at the expense of the taxpayers.

A bill was filed recently in Congress that would grant Sarangani Rep. Manny Pacquiao lifetime income tax exemption, in appreciation for the honor and pride he has brought to the country through his victories in the boxing arena.

It also provides that all other income tax liabilities he may have incurred in previous years shall be “obliterated by the operation of this act.”

In what appears to be a case of one-upmanship, a party-list congressman wants the exemption to cover all amateur and professional athletes in local and international sports competitions, whether held here or abroad, sanctioned by their national sports associations or any recognized international sports organization.

The tax break would apply to prizes and awards earned 10 years prior to the date the bill is enacted into law. If taxes have been paid on them, the athletes shall be entitled to tax credits.

These bills were filed by Pacquiao’s colleagues in reaction to the writ of garnishment issued by the Bureau of Internal Revenue on his bank accounts to compel him to pay some P2.2 billion in unpaid income taxes.

Revenue Commissioner Kim Jacinto Henares has described the proposed grant of tax exemption to Pacquiao as unfair and unconstitutional because it violates the equal protection clause of the Constitution.

Discrimination

The timing of these bills is very bad.

Congress has yet to recover from adverse public reaction to the blatant abuse and misuse of pork barrel funds and here comes some congressmen proposing the enactment of a law that will give special tax treatment to a fellow member who is a confirmed billionaire.

It is as if the P10-billion pork barrel scam that unraveled recently is a non-event and that the public would continue to tolerate the lawmakers’ “scratch my back, I’ll scratch your back” mode of conducting their official and personal lives.

They’re cashing in on Pacquiao’s popularity to make the scheme palatable to the public. To give it a semblance of “equality,” the privilege is being made applicable to athletes who have won or may win international sports competitions. Nice try, but the smokescreen is too obvious to be overlooked.

There is no question that Congress has the right to grant tax exemption to whoever or whatever entity it believes deserves it. It’s a prerogative it can exercise whichever way it wants as long as it does not violate the constitutional principle on equal protection of laws or non-discriminatory treatment of similarly situated persons.

If Pacquiao and the winning athletes are to be rewarded with exemption privileges for giving honor and prestige to the country, shouldn’t the same treatment be accorded Filipinos who win or have won international contests in other fields of competition?

Prestige

Unless the congressmen have been living under the rock all these years, they should know that, for example, the Madrigal Singers, Loboc Children’s Choir and other singing groups have won various awards in singing competitions in different parts of the world.

So too have high school students from Metro Manila and the provinces made our country proud with their victories in science, mathematics and other academic contests in the Asean region, despite inadequacies in educational facilities and teaching aids.

Similar honors have been garnered by Filipinos who participated in ballet, painting and other arts-related engagements in various world capitals.

These are only some of the areas in international competition where many of our countrymen have participated in and proven that they can, even without government support, go toe to toe with the best and the brightest that the rest of the world can offer.

Their achievements do not get media attention, much less recognition from the government, because, unlike boxing and other hyped-up sports, they do not have commercial sponsors behind them that can exploit their awards into instruments for the promotion of their products or services.

If some congressmen think intellectual or artistic excellence in international competitions does not bring prestige to our country and therefore undeserving of appreciation they propose to give to boxing and other athletic activities, we have reason to grieve about the quality of the people we have elected to Congress.

Reduction

The problem with tax exemptions is they distort the revenue structure of the country and, no thanks to imaginative tax lawyers and accountants, provide opportunities for tax evasion.

Before the bill on tax exemption of athletes was filed, did its proponent conduct a study on how many people within the proposed 10-year coverage period can avail themselves of that privilege? Offhand, that number could run into thousands since local and international sports contests have been practically a dime a dozen in recent years.

And has the sponsor figured out how much revenues stand to be uncollected or diminished by way of tax credits for past tax payments? So how will the shortfall in tax collections that will result from the exemption be made up? Through additional taxes or the reduction of government subsidy for basic public services?

If at all, the only redeeming factor of the reduction in tax collections is the congressmen and senators will have less money to steal from the national treasury to line their pockets. Small comfort only the mentally infirm will enjoy.

Congress will do the country a big favor if it adjourns as soon as possible to prevent its members from coming up with legislative proposals that betray their moral and intellectual bankruptcy.

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