Making Taxes as Permanent as Death

Making Taxes as Permanent as Death

(Note: This article appeared on Business Mirror, Sunday, 10 April 2011)

 IT has been said that there are only two things, which are permanent in life: taxes and death.

Filipinos refuse to recognize this simple truth. They always try to evade and cheat on both death and taxes. Most of the time, they succeed in evading taxes and cheating on tax payments. Death, of course, is a different matter all together, although not for lack of trying on their part!

Despite all the advances in science as well as preoccupation with the occult, death has only been postponed; life has only been lengthened.

Not so with taxes, especially in the Philippines. Tax avoidance is routine. Tax evasion is common. Nonpayment of taxes is not really considered a bad thing. The attitude is that if we can’t avoid death, at least, we can avoid taxes! But not for long, hopefully.

Once more with feeling: High-profile tax-evasion cases

New administrations always usher in hopes of reform. This includes tax reform and enhanced tax collection. Tax amnesties are favorite gimmicks of governments. The filing of tax-evasion cases against high-profile personalities are periodically resorted to. Sadly, after the initial media excitement and public speculation, interest fades; the momentum slows down and the government is left once more with half-empty coffers.

On Friday the Bureau of Internal Revenue (BIR) announced the filing of tax-evasion charges against the elder son of former President Arroyo, Rep. Juan Miguel “Mikey” Arroyo and his wife, Angela. The BIR claims the couple has a tax liability of at least P73.85 million.

The BIR also announced that the Department of Justice has decided that there is probable cause for charging Macario Lim Gaw Jr. with a P5.5- billion tax case. It is expected that the Arroyo case will only be the first in a string of “big-time” cases.

Political harassment and all that

As expected, Arroyo has cried “political harassment.” He also claims that the filing of the tax case was resorted to in order to divert public attention from the waning ratings of the President. I don’t think so. The BIR has been under tremendous pressure for some time. It has to implement a campaign promise of the President that there will be no new taxes. It also has a major role in the anticorruption strategies of the present administration since it has long been considered rightly or wrongly as a “flagship” of corruption.

In 2010 the BIR incurred a shortfall of P37.8 billion in actual collections vs. collection goals. It cannot afford to repeat the same “accomplishment.” The expectations from the public are too high. No less than the DOF secretary has assured the public that there will be no new taxes until 2012. This can only mean that increased collections can only come from heightened efficiency and effectiveness in collecting existing taxes.

We wish the best for the Department of Finance and the Bureau of Internal Revenue, as well as the Bureau of Customs and the Bureau of Treasury.

Rising levels of hunger and the conditional cash-transfer program

The President is reportedly surprised that levels of hunger and poverty are rising even as it is claimed that 400,000 families have been reached by the conditional cash-transfer (CCT) program. It seems that hunger reduction is correlated with the CCT program in the minds of its advocates.

It must be remembered that the SWS survey is a survey on hunger. On the other hand, while the CCT is directed toward poor families it does not necessarily mean that all of them are hungry. It does not also mean that all the hungry people in the country are covered by the program.

The CCT is directed primarily to poor families who are required to send their children to school and pregnant mothers to health centers. It is possible that a significant number of those who are hungry don’t have children of school age or child-bearing mothers. Are they covered by CCT?

Mention has been made of Metro Manila. Take the taong-grasa and those who live under the bridges, on street islands and on sidewalks. It is likely that they are hungry. It is possible that their children are not in school and that mothers don’t go to health centers. Are they covered by CCT?

Finally, Mahar Mangahas has emphasized that inflation, in general, and food-price inflation, in particular, are key determinants to hunger and poverty. The moral of the lesson is: it is too much to expect CCT to reduce hunger and poverty.


Leonor Magtolis Briones

Accounting (1958);

Professor Briones is former National Treasurer of the Republic of the Philippines. She is an Outstanding Sillimanian in the field of Fiscal and Public Administration, and has served Silliman University as Chairperson of the Board of Trustees. She holds a Post-Graduate Diploma in Development Organization major in Public Enterprises and a Certificate in Policy for Public Enterprise from Leeds University in England and the Harvard Institute for International Development, respectively. Presently, she is professor at the National College of Public Administration and Governance at the University of the Philippines. Professor Briones maintains a regular column, “Boiled Green Bananas, ” in the Business Mirror.