What I Think About the E-VAT
Almost everybody living in the Philippines has paid taxes. Even if you’ve never filed something for B.I.R., VAT ensures that even the smallest child does not escape taxation.
Value Added Tax is the government’s way of collecting taxes from some specific products and services, as the good is purchased. The current VAT, at 10%, and what are charged with VAT, is fine.
But now, the government has been discussing Expanding VAT. It’s not just increasing VAT, from 10% to the suggested 12%, even though this point alone annoys many of our business people. Some of my Business Management professors liked the idea that the VAT was exactly 10%. It was so easy to compute. Just move the decimal point by one digit to the left and you have its VAT. No messy computations, and it was so easy to check. But if it will become 12%, Business Managers better keep their calculators handy because it’s not as easy to check mentally anymore, and in a country where many processes could be automated by developing software for their businesses, what could be done isn’t necessarily what happens.
I admit that that point is rather frivolous, but rather it is the actual increase in the price of goods which will be the heavier burden laid upon the consumers. The government simply shrugs that off by saying that VAT should be shouldered by the producing companies, and not passed on to consumers, but like what I said earlier, just because it is what’s supposed to happen doesn’t mean that it is what will happen. These companies don’t even bother to deny in televised interviews that VAT is passed on to consumers; they directly say it as if that is what is supposed to happen. The government should get real and stop talking in theoreticals just to push what they believe in or what they want.
The increase in price of goods already with VAT isn’t the only problem. What’s worse is that now the government is considering adding VAT to basic commodities, which to my understanding were previously VAT-exempt. Basic commodities like rice, sugar, instant noodles and pan de sal (most popular Filipino bread for breakfast), which are usually the only things the masses can afford to eat regularly, even medicine, medical services, gas and electricity, the government will now also be putting a hand on these cookie jars. As if their jaws weren’t full enough.
Excuse me if I’m skeptical about the Philippine government. Don’t get me wrong. I love the Philippines, and I am proud that I am a Filipino. If it were my choice, I would live here till I died. But, not even I can deny the fact the Philippines is a corrupt nation, named the second most corrupt nation in the world, if I remember correctly, by a popular magazine. (You may also read the reasons why I supported Bro. Eddie Villanueva in my other article, “Why I’m Voting for Eddie Villanueva” . Unfortunately, he didn’t win, but I hope he runs again.) The government may deny this, and although a few of them are straight, many others are not.
Increasing taxes in itself is not a solution. If anything, it will just increase the amount of money stolen by corrupt public officials. And the terrible thing about it is that they would now like to steal from the poorest of the poor, the Filipino masses who survive on pan de sal and coffee, no sugar nor cream, in the morning, noodles and rice in the afternoon and perhaps sardines in the evening, if they are that fortunate, while many greedy public employees could care less how they waste the money that should be used for the people they are responsible for.
Obviously, the solution isn’t to increase taxes, but to solve corruption. Unfortunately, that may be a task too difficult to accomplish very soon. So, if the country needs additional budget now, what are we to do for the meantime?
I would like to offer another solution. Increase sin taxes. Again. Sin taxes are levied on products that are not necessary but are available for the indulgence of those who take pleasure in them, such as cigarettes and alcoholic beverages. Sin taxes have been increased quite a number of times already, but for me, increasing sin taxes again is still better than taxing basic commodities. Such products are not necessary and even harmful, thus sin taxes also act as deterrents, and if anyone would like to indulge in them, they should be willing to pay extra, for the benefit of the populace which they probably pester or trouble with the effects of their vices anyway. Also, according to one of my teachers who has been familiar with a couple of Asian nations, the Philippines still has one of the lowest sin taxes there is. He says that when foreigners from other Asian countries come to the Philippines, they drink as much beer as they can because beer here is one of the cheapest because sin taxes in other countries are way out there. If that’s the case, there is no reason to continue allowing our countrymen and visitors to enjoy these indulgences at such a low price while we raise prices of important basic commodities such as food and medicine.
I have another suggestion. Raise entertainment taxes. Again. Although we have raised entertainment taxes again and again, it is again better to increase taxes of the movie industry and other entertainment related products and services which are also just indulgences of those who take pleasure in them rather than increase the prices of basic commodities which are not just wants, but needs. These entertainment services and products, to me, are usually not even worth the money invested on them, being extremely shallow. Don’t get me wrong, some of them are really great and worth endorsing, but most really just aren’t. Some people wouldn’t agree with me there, but chances are, most of them would belong to the entertainment industry. Those in the entertainment industry would say that increasing the entertainment tax would kill the entertainment industry, but given my earlier sentiments, I don’t see how that could be a problem. An industry where those products that are truly worth supporting are the ones that are hardly noticed may not be worth saving at all. Maybe if it did “die”, only the truly worth supporting ones would actually survive. Maybe. But with so many of our public officials coming from the entertainment industry, what do we expect? We get what we voted for. Thus, entertainment tax remains as is, with many people in the entertainment industry enjoying the benefits of their business, even the most frivolous ones, while many of the masses that support them and place them where they are can’t even afford a decent meal.
There are so many other ways the Philippines can rise from its highly under budgeted situation, without taking more from those who already have very little while keeping the corrupt and the indulgent resting comparatively comfortably.
- A. L. E. -
(Originally written: 2005, May 5, 8:58 pm)
Value Added Tax is the government’s way of collecting taxes from some specific products and services, as the good is purchased. The current VAT, at 10%, and what are charged with VAT, is fine.
But now, the government has been discussing Expanding VAT. It’s not just increasing VAT, from 10% to the suggested 12%, even though this point alone annoys many of our business people. Some of my Business Management professors liked the idea that the VAT was exactly 10%. It was so easy to compute. Just move the decimal point by one digit to the left and you have its VAT. No messy computations, and it was so easy to check. But if it will become 12%, Business Managers better keep their calculators handy because it’s not as easy to check mentally anymore, and in a country where many processes could be automated by developing software for their businesses, what could be done isn’t necessarily what happens.
I admit that that point is rather frivolous, but rather it is the actual increase in the price of goods which will be the heavier burden laid upon the consumers. The government simply shrugs that off by saying that VAT should be shouldered by the producing companies, and not passed on to consumers, but like what I said earlier, just because it is what’s supposed to happen doesn’t mean that it is what will happen. These companies don’t even bother to deny in televised interviews that VAT is passed on to consumers; they directly say it as if that is what is supposed to happen. The government should get real and stop talking in theoreticals just to push what they believe in or what they want.
The increase in price of goods already with VAT isn’t the only problem. What’s worse is that now the government is considering adding VAT to basic commodities, which to my understanding were previously VAT-exempt. Basic commodities like rice, sugar, instant noodles and pan de sal (most popular Filipino bread for breakfast), which are usually the only things the masses can afford to eat regularly, even medicine, medical services, gas and electricity, the government will now also be putting a hand on these cookie jars. As if their jaws weren’t full enough.
Excuse me if I’m skeptical about the Philippine government. Don’t get me wrong. I love the Philippines, and I am proud that I am a Filipino. If it were my choice, I would live here till I died. But, not even I can deny the fact the Philippines is a corrupt nation, named the second most corrupt nation in the world, if I remember correctly, by a popular magazine. (You may also read the reasons why I supported Bro. Eddie Villanueva in my other article, “Why I’m Voting for Eddie Villanueva” . Unfortunately, he didn’t win, but I hope he runs again.) The government may deny this, and although a few of them are straight, many others are not.
Increasing taxes in itself is not a solution. If anything, it will just increase the amount of money stolen by corrupt public officials. And the terrible thing about it is that they would now like to steal from the poorest of the poor, the Filipino masses who survive on pan de sal and coffee, no sugar nor cream, in the morning, noodles and rice in the afternoon and perhaps sardines in the evening, if they are that fortunate, while many greedy public employees could care less how they waste the money that should be used for the people they are responsible for.
Obviously, the solution isn’t to increase taxes, but to solve corruption. Unfortunately, that may be a task too difficult to accomplish very soon. So, if the country needs additional budget now, what are we to do for the meantime?
I would like to offer another solution. Increase sin taxes. Again. Sin taxes are levied on products that are not necessary but are available for the indulgence of those who take pleasure in them, such as cigarettes and alcoholic beverages. Sin taxes have been increased quite a number of times already, but for me, increasing sin taxes again is still better than taxing basic commodities. Such products are not necessary and even harmful, thus sin taxes also act as deterrents, and if anyone would like to indulge in them, they should be willing to pay extra, for the benefit of the populace which they probably pester or trouble with the effects of their vices anyway. Also, according to one of my teachers who has been familiar with a couple of Asian nations, the Philippines still has one of the lowest sin taxes there is. He says that when foreigners from other Asian countries come to the Philippines, they drink as much beer as they can because beer here is one of the cheapest because sin taxes in other countries are way out there. If that’s the case, there is no reason to continue allowing our countrymen and visitors to enjoy these indulgences at such a low price while we raise prices of important basic commodities such as food and medicine.
I have another suggestion. Raise entertainment taxes. Again. Although we have raised entertainment taxes again and again, it is again better to increase taxes of the movie industry and other entertainment related products and services which are also just indulgences of those who take pleasure in them rather than increase the prices of basic commodities which are not just wants, but needs. These entertainment services and products, to me, are usually not even worth the money invested on them, being extremely shallow. Don’t get me wrong, some of them are really great and worth endorsing, but most really just aren’t. Some people wouldn’t agree with me there, but chances are, most of them would belong to the entertainment industry. Those in the entertainment industry would say that increasing the entertainment tax would kill the entertainment industry, but given my earlier sentiments, I don’t see how that could be a problem. An industry where those products that are truly worth supporting are the ones that are hardly noticed may not be worth saving at all. Maybe if it did “die”, only the truly worth supporting ones would actually survive. Maybe. But with so many of our public officials coming from the entertainment industry, what do we expect? We get what we voted for. Thus, entertainment tax remains as is, with many people in the entertainment industry enjoying the benefits of their business, even the most frivolous ones, while many of the masses that support them and place them where they are can’t even afford a decent meal.
There are so many other ways the Philippines can rise from its highly under budgeted situation, without taking more from those who already have very little while keeping the corrupt and the indulgent resting comparatively comfortably.
- A. L. E. -
(Originally written: 2005, May 5, 8:58 pm)
