Seen tax again—and again
Every three years in this country, where some 40 million people are considered poor, putting the Philippines among the 60 poorest countries in the world, somebody in government makes a lot of noise about—get ready for this—“sin tax.”
This time, under the Aquino (Part II) administration, the customary “sin tax” rumbling comes courtesy of the Ledac. This, as you know, is the powerful “Legislative Executive Development Advisory Council.”
Of course it is hard to say which way the “advice” goes in the council, whether from the executive branch to the legislature, and vice versa, or from some interest groups in business, either local or foreign.
Anyway, the mandatory “sin tax” chatter that comes every three years has something to do with the election of our beloved lawmakers. Every time we have a new Congress, in other words, we witness “sin tax” festivities. Every three years or so!
Thus the Aquino (Part II) administration is right on schedule. Only this time, the noise takes on a crusading tenor. All of a sudden, taxation becomes an issue of morality. Let us punish those who are sinning with prohibitive tax. Something like that!
And so, taking its cue from the cute administration of Gloriaetta, which also created a lot of talk about “sin tax” in all its almost 10 years in office, the Palace now is pushing—and pushing hard—for changes in the tax law on liquor and tobacco products.
The law came into being in the 1990s, during the time of former President Fidel Ramos, aka Kuya Eddie, changing the system from “ad valorem” (percentage) to “specific” (definite peso terms).
Every three years or so since then, certain government officials would rise up and bring out the same arguments on why we need to amend the law, the same arguments used during the time of Kuya Eddie.
Foremost among them is the need to raise revenues. And what better way to do this than by exacting money from those who sin by indulging in such shameful, reprehensible vices as smoking and drinking, right?
Liquor and tobacco companies, on the other hand, argue that the government cannot really afford to overtax their sector. Consumers would simply switch to lower-priced brands, most probably smuggled items (i.e. tax-free), thanks to the high tax on the legitimate local products. And so the government tax collection would even drop.
There—that is the gist of all the highfalutin noise on “sin tax” that is heard every three years or so. Do you think there is, ahh, er, uhm, well, an agenda here somewhere?
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To the guys down here in my barangay, whatever the government does with the “sin tax” is a sure direct hit.
Well, they are the guys whose little happiness comes in the form of a stick of cigarette, bought “tingi” from the street vendor perhaps, or a bottle of “bilog” shared with some neighbors.
You know—what little vice they can afford.
And I wonder how such vices play in the country’s “happiness index” among the poor. I only know that inflation, thanks to the drastic increase in oil prices, already battered their purchasing power.
Many of us certainly have less money now for leisure.
I mean, really, these are the guys who cannot take part in the “Iron Man” competition in CamSur, for instance, where some athletes ride bicycles costing more than half a million pesos, which surely elevate their “happiness index.”
Anyway, our leader Benigno Simeon (aka BS) insists that he will not have anything to do with new taxes. He would go for tax collection efficiency and all that BS-brand of revenue generating moves.
He even cited a clear anomaly: We have some 1.7 million professionals, paying only some P9.8 billion in taxes every year, or less than P6,000 each on the average.
Apparently, however, both our lawmakers and Cabinet members are not inclined to spend time implementing stupid tax reforms as plugging loopholes in income tax payments of those professionals.
Basta, “sin tax” is the only way. Right on schedule!
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For an out-of-tune song these days, you can get “Huawei” brand of phones and tablets in this country, such as in Divisoria, Greenhills and any tiangge, or flea market.
“Huawei” of course is a leading electronics manufacturer in China, conquering the Philippine market with its supposedly unbeatable prices. I heard it even hired this Asia Pacific College, or APC, to certify would-be dealers and tech support personnel.
Here is a little caveat emptor: Based on news reports, Huawei is having trouble with the government in China.
For example, the China Audit Commission (CAC) and the China Banking Regulatory Commission (CBRC) already ordered a recall of bank loans to Huawei employees.
The findings of the commission reportedly showed that the company used the loans to increase its capitalization, using its employees initially but later transferring the new stocks to Huawei itself.
Reports said that the Huawei employees supposedly got the loans from the Bank of China, China Merchant Bank, PingAn Bank and China Construction Bank.
The Chinese regulators thus ruled that Huawei was already dealing in securities without a license. The company was not even listed on the stock market.
In effect, the company raised money through such a scheme to the tune of almost $2 billion, which even at the current low conversion rate of the American dollar, the Chinese authorities considered as a huge amount.
In effect, if the company obtained the loan itself, its books would have shown a mountain of debts. And the Chinese authorities noted that the company has been doing the allegedly “illegal” scheme for the past four years or so.
Go ahead, just Google the company, please.
