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Monday, February 4, 2013

More Dole Outs Equals More Taxes Equals More Corruption

In addition to the abominable Conditional Cash Transfer Program, the Aquino Administration has come out with yet another set of horror: The Reproductive Health Law and Republic Act 10351, commonly known as the “sin tax” law.
This incipient RH law, if we are not mistaken, will enable the government to spend nearly P20 Billion a year to give “the poor” FREE Reproductive Health Services and Products.  Included in this “Christmas basket” of goodies are also the option for congressmen and senators to purchase vehicles for RH services for their districts — that’s one vehicle per congressional district plus, possibly, another vehicle per district coming from Senators.
If you don’t know what vehicles bought by congressmen for their districts look like, well, they’re essentially election advertisements on wheels which the Comelec and the Office of the Ombudsman allow on scant legal justifications.
In addition to the RH Law, we now have the new Sin Tax Law which according to the Yellow Press:
…will raise about P34 billion in additional revenues from tobacco and alcohol in 2013, and P184.31 billion in the next 4 years. The P34 billion projected revenues are lower than the P60-billion target set by the DOF, but Finance Secretary Cesar Purisima said it can cover the universal health program of President Benigno Aquino III.
Oh wow! Do you see how the RH Law and the Sin Tax Law fits?
And never mind the inconvenient fact that most government funds (about 60 percent to 70 percent) for programs go to the pockets of suppliers who “kickback” some of the funds to congressmen as well as senators.
One old tale we learned about was the under delivery of medicines perpetrated by a former lady senator in various districts.  This progeny of a former chief justice and staunch ally of a former President made arrangements with a pharmaceutical supplier whereby the company would deliver only 20% to 30% of the goods but on paper declare it had delivered 100% — the difference (kickback) would be handed over or transferred in cash to a bank account.
The thing with medicines as a source of kickbacks is that there is absolutely no way to trace whether it was actually dispensed or used.  And if it is easy for medicines, how much easier will it be for condoms or pills or vasectomies or tubal ligation and what-not?  We can’t even imagine the inutile and corrupt Commission on Audit to actually go shanty to shanty in some congressional district to check if the poor folks are have satisfying and safe sex using government procured condoms and pills!
Who knows? The Aquino bright boys may even think of passing a law creating “The Safe Sex Police”.  And just think about what people would bribe them with just to get away with having unsafe sex?
reproductive health police sex police
Anyway, as far as new taxes are concerned, I really wonder if there is a real need for them especially when you consider that the government needs a lot of help catching tax evaders.
As far as tax evasion is concerned, among the first names that come to mind is Lucio Tan and the government’s failure to get him to pay the alleged unpaid taxes amounting to P25 Billion.
To be fair to the Second Aquino Administration, it seems that BIR Commissioner Kim Henares is somewhat bent on achieving the 1 Trillion Peso tax collection target and the aggressiveness with which her agency is collecting has some businesses reeling.
One anecdote about Henares that didn’t escape our ears was when she attended a party of a luxury car importer.  As soon as she crossed the threshold of the venue, rich luxury car enthusiasts started walking out in droves!
Nevertheless, despite being a terror of sorts, the fear hasn’t sunk in deep enough to keep some companies from continuing to evade taxes.
An anonymous email sent to us over the weekend pointed us in the direction of a beauty product company which allegedly has some P1.5 Billion to P 2 Billion in unpaid taxes.
Silka Papaya, according to the terse email, has been manipulating its financial statement to reflect a lower income and higher expenses — thereby making its taxable income smaller.
silka papaya tax evasion case
In 2011 alone, Silka Papaya’s financial statement says that it earned P990 Million but data from a reputable market research firm says it actually earned P1.5 Billion.  The market research firm only tracks sales recorded using Computerized Point of Sales Systems and if one were to account for sales at Sari-sari stores, Silka Papaya’s sales may actually be around P2 Billion!

How’s that for under-declaring income?!  Saying that income has been under declared is just a polite way of saying that Silka Papaya committed tax fraud.
According to its GIS which can be obtained at the SEC, Silka Papaya is manufactured by Cosmetique Asia.  Its corporation papers names Alexander S. Co as its President and we assume the other people named as its officers are also his relations (probably his children).
Then again, while most people will say tax fraud is a crime, not paying your taxes could be a form of civil disobedience and a protest in itself — a move which Cory Aquino and her pre-EDSA uprising allies supported.
I think it would be warranted, at this point, considering that it is the middle class that really saw through the Second Aquino Administration’s sham candidacy and sham presidency, and went against his candidacy and continues to go against his administration.  And right now, it is the same middle class that is being hobbled by an aggressive tax collection drive coupled with a higher sin taxes.
If at all there is some kind of conspiracy that keeps poor Filipinos poor and makes the Elite even richer, it is the unequal way in which taxes on income are collected.
Employees who get salaries don’t have a choice but to pay their taxes since one fourth to one third of their pay is automatically with held by their companies and paid to the government.  Businessmen, on the other hand, just pay taxes on whatever income they declare (which could be, like in Silka Papaya’s case, just a fraction of what it really earned) and it takes the government a long time to collect from companies, if at all.

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