Philippine Commentaries

Read Malaya's daily commentaries on economic and political developments that shape Philippine society. Veteran Filipino journalist Joy C. de los Reyes is the paper's editor-in-chief of Malaya, an independent daily newspaper in the Philippines. To visit Malaya's website, just click the Malaya link below.

Friday, June 23, 2006

Penalizing the victim

Taxes are expenses. No businessman with an eye to the bottomline would hand over money to revenuers with a smile. In fact, he hires expensive lawyers and accountants to reduce his liabilities to the Bureau of Internal Revenue.

The businessman who pays "revolutionary taxes" to communist rebels does so not out of sympathy to the programs of the Communist Party of the Philippines. He is clearly a victim of threat and coercion.

It is easy for Executive Secretary Eduardo Ermita to threaten those who pay "revolutionary" taxes to the communist rebels. His person is heavily secured by the Presidential Security Group. His property is not vulnerable to confiscation or torching.

But for a small trucker, fishpond owner, grains trader and miller, coconut or sugarcane planter, the reality of being killed or his machinery being burned in areas where the New People’s Army is active is a day-to-day reality. He would rather come across than prematurely meet his Maker or go out of business.

And it’s not only small businessmen who enter into sub rosa arrangements with NPA "tax collectors." Contractors of infrastructure projects, mining companies and transport operators pay "taxes" to the rebels. They just book the payments as expenses incurred in the ordinary course of business.

As we said business comes to an accommodation with the rebels not because of ideology or politics. They do so because business is business.

Consider the two telecommunication companies who dominate the cellular telephony business. One’s cell sites located in the countryside are blasted with regularity by the rebels. The other’s sites appear immune to rebel attacks. No need to guess who’s playing footsies with the rebels.

The fact is the government cannot secure the facilities of these business outfits. They pay VAT, franchise and sundry taxes. They are hit by taxes to the extent of almost a third of their income. For all the money they are sharing with the government, the latter could not extend them adequate protection.

Taxpayers – individual and corporate – are not getting back their tax money in the form of government service.

Ermita should stop threatening businessmen who submit to NPA exaction. He should instead see that law enforcers do their job. If businessmen feel secure enough, they will stop paying to the NPA.



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