Here is a scenario:
One day a tax agent knocks at your door and asks you whether you have already paid your taxes, what would be your reaction? Infuriated? Maybe. Glad? Probably not. It is our natural human aspiration to live a simple and easy life—a tax-free life. How we wish that every time we get out of bed in the morning, we think of nothing but what to have for breakfast or clothes to wear the next day so on and so forth. But here is the thing, we simply cannot.
As the cliché goes, only two things in life are certain: death and taxes (as certain taxes apply after we die). Death is a fact. More than that, it is a reality. We are all going to become food for the worms as John Keating put it in the movie Dead Poet Society. Likewise, taxes affect us much in the same way as the air that we breathe. For instance, the moment you swipe your credit card for payment or watch your favorite flick on the big screen or party out with friends at this local club or treat yourself to a day of rejuvenating spa; even at work, taxation comes into play in the form of deduction from your monthly salary. There is simply no escape. Many have tried to evade the payment of taxes and their commonality—tax fraud cases being filed against them in the court of justice. Some were even brave enough to think that the long arms of the law would not catch up on them in the belief that they are too significant or powerful to be admonished.
There are no exemptions from paying our taxes—whether you are in politics or in showbizness or just an ordinary taxpaying public. Take the case of Richard Gomez who is likely to be convicted once his tax fraud case reaches the Court of Tax Appeals. If proven guilty of the complaint filed against him which includes:
1. failure to file income tax return for 2000-20003;
2. failure to declare his income of 1.8 Million from ABS-CBN and 1 Million from GMA-7 and his source for the acquisition of the Posh Forbes property amounting to more than 50 Million,
he will be serving a jail term of not less than two years but not more than ten years in addition to P 100, 000 he is mandated to pay. As the saying goes, there are no sacred cows in the fight against tax evaders. If that is the case, what is the reason behind people evading their taxes if they knew all along that they would be dealt with accordingly? The public has no sentiments for lawbreakers especially if they are those who live their lives in uppity. What they initially thought as a sure gain was in fact a misnomer for outright irreversible loss, something to regret about for the rest of their lives.
To rephrase the question posted earlier on: Is there really a need to pay our taxes?
First, let us put a distinction between tax evasion and tax avoidance. While there is a legal difference between the two, both will result in lesser collection efficiency on the part of the tax system and tax administration. To others, there is a very thin line between avoidance and evasion for which reason evasion is oftentimes mistaken as mere avoidance. By tax avoidance, we mean a legitimate scheme for paying a lesser tax while evasion is totally prohibited under the law.
A recent online poll was conducted by concerned society groups with the subject—“Would you willingly pay your taxes if you know that the government is using the taxes for the common good?” The result was not surprising. Eighteen votes were cast; seventeen answered in the affirmative, that they are willing to pay their taxes even if they are not forced to pay under threat or imprisonment, and only ONE voted “No.” This goes to show that despite the recent global financial crisis that is plaguing our country and the whole world, the Filipino people still believe in the necessity of paying our taxes. Here’s why:
1. The growth of the domestic economy is largely dependent upon the productive effort and spending behavior of both the government and private sector. The government and the private sector are interdependent with each other.
2. The productive effort and spending behavior of government are dependent upon the revenues and taxes it generates and the quality of its governance. All the goods and services provided by the government make up the public sector of the economy. The government pays for most of the services with money it collected from taxes, fees and charges, otherwise funds are obtained through local or foreign borrowings.
3. The productive effort and spending behavior of the private sector is influenced by the availability of the country’s productive resources such as labor, capital, its natural resources, technology and the business environment which includes the quality of leadership both in the public and private sector.
4. Business is market-driven. It is influenced by economic forces such as the law of supply and demand, profit, prices, competition, and distribution of income but not taxation. Taxation is neutral in the sense that it should be the least consideration in the decision to venture into business, to sustain or to close it. In other words, what makes up a successful business is not determined by how much taxes it pays but by investment decisions that are based on sound economic grounds.
Based on the 2007 BIR Annual Report the basic source of revenue collection comes from taxpayers’ voluntary payments, followed by preliminary and final assessment and delinquent accounts. Here is the thing, although taxes are enforced proportional contributions levied by the State by virtue of its sovereignty for the support of the government and for all its public needs, the BIR relies on the taxpayers’ voluntary declarations. Therefore, the talks going around like bushfire that BIR forces their taxpayers to declare more so they would pay bigger taxes, something to that effect, are absolutely false and baseless. It is not for the BIR to coerce the taxpaying public, much worse, to threaten or intimidate in order to reap bigger collections. Its powers are categorically defined in the 1997 National Internal Revenue Code.
The reliance on voluntary declarations has its roots on the country’s current lack of sophisticated technologies that can maximize access to third party information including bank records and lack of resources. This method of self-assessment inarguably downgrades the enforcement aspect of taxation since the tax authority is now dependent on voluntary compliance of the determination of the correct tax. One my appropriately ask, can the government still attain its budgetary objectives by relying on the assumption that, on their free will taxpayers will pay the correct tax? Phased otherwise, what then can propel taxpayers to comply with the changing tax laws that are man-made? Danilo Duncano, CPA, a former chief of staff of the Office of the Deputy Commissioner Operations Group, has an answer to that when he said, ““Tax laws are best complied based on a perception that violations are immediately and easily detected, sanctions or penalties are swiftly imposed. If the tax system cannot build and sustain such perception, then the tax administration will have difficulty performing its task in meeting the budgetary needs of the state. However, if such perception exists then the government can rely on the assumption that there is a high degree of tax compliance among taxpayers. This level of consciousness is even strengthened when the government is credible in the way it spends its tax collections, whether such spending is really for the common good or only for the benefit of a favored few.”
In 2007 alone, the total National Government Tax Revenue amounted to P932.937 Billion and out of this amount, 76.49% came from BIR’s tax collections and remittances, which was 75.91% higher than 2006. Based on this statistics, we can say that tax is indeed the lifeblood of a nation. Without taxes, how can the government support its programs for national development? Of course, we can resort to outside sources like foreign subsidies and financial aids but those are extremely impractical considering that we have to cover for interest.
In case you do not know, as of February 2006, the national government’s total indebtedness has ballooned to 3.96 trillion; 2.17 trillion in domestic debts and 1.79 trillion in foreign debt. For the year’s proposed 1.053 trillion budget, interest payment alone, at 340 Billion, account for 32% of the entire fiscal pie. There is no reason why we rank 37 out of 206 with foreign debts.
As pointed out earlier, no one is exempt from the payment of taxes. Where the money goes or how is it being channeled whether for the common good or for the good of a select few, nothing justifies the non-payment of taxes. This may sound brute and uncompromising but it also entails a challenge: To choose the right leaders whose loyalty lies more on the people than on their pockets.
So the next time you think of evading your taxes, think of the millions of pesos that the government loses for infrastructure developments, free healthcare and insurance services, educational programs, housing projects for the homeless, contingency funds in times of calamities, better roads, bridges, airports, wharfs, etcetera. These things may not benefit us directly, but it is the sense of being able to contribute a portion of your income for the general good that matters most.
With that spirit of generosity, paying our taxes transcends from a mere obligation to just plain responsibility.
The title may have been his passport to instant fame but it is never a guarantee take for instance, Taylor Hicks, Season 5 winner who had been dropped from his record label due to poor record sales. The Soul Patrol, as he called himself, never really capitalized on his mass appeal and in the end it is his runner-up Katherine Mcphee who got all the endorsements, publicities and even cameo roles in CSI and House Bunny.
Manny was doing his normal rituals until he was nabbed away from the crowd for a brief interview. He was even labeled by Bob Arum as “the greatest fighter to have ever lived.” Hatton finally regained consciousness but still half-dazed by the turn of events. If I were to describe him, he was like a child who just pooped in his diapers!
