Corporate Tax Reduction

I understand that the Bureau of Internal Revenue is being asked to come up with ways to increase its collections this year to make up for the effect of the impending decrease in Corporate Income Tax from 35% to 30%, which is expected to bring down revenues by as much as PHP 15 billion.  I believe that, regardless of whether there is an increase or a decrease in the tax rates, the BIR should always be seeking to improve its collection methods through stricter implementation, changes in policy and lobbying for or recommeding legislation, if necessary.  There is consensus that the Philippines’ current taxation program is very complicated and offers many loopholes for manipulation and abuse while its incentive programs are overlapping and can cause "double" exemptions.  Overall, there is much improvement to be expected in both regulation and implementation.

Corporate Income Tax accounts for as much as 30% of the Bureau’s collections, the remainder being composed of Individual Income Taxes and others.  It should be noted that the tax rate for the top bracket for individual income taxes currently stands at 32%.  At these tax levels and with our population, I should already expect to receive welfare or, at the very least, free primary and secondary education at par with most private schools as well as universal healthcare.  And yet, we are far from these.  Yes, you can send your child to public school but at the cost of quality.  Most public schools can hardly afford a decent library let alone maintain a high quality of education.  You can also send yourself to one of many public hospitals but don’t expect to receive the same level of care and have access to the modernized facilities and equipment that you would at a private hospital.  In fact, many public hospitals have separate paying and non-paying wards where the difference is obvious.

At these tax levels, I should at expect to drive on smooth, well-paved avenues that are maintained regularly to ensure the safety of the people using it.  At the very least, the street in front of my house to be maintained at a reasonable level.  This isn’t the case, however.  Our beloved EDSA undulates because of the many inconsistent repairs that it has seen over the years.  It’s much better now but it can’t compare to the level of maintenance received by the South and North Luzon Expressways.  I drive to and from Makati everyday, there’s practically a new pothole or an obstruction somewhere along the road each day.  There’s literally a large crater at the corner near our house, it’s a good thing I’m driving a pick-up.  Just a few streets away, another Maynilad/Manila Water construction has pretty much obliterated one of the few decent streets in the neighborhood.  We all know what happens when these guys pass through town.

I haven’t even started talking about traffic.  While it’s commendable that at least they’re trying new ways to improve it trraffic, most of the time I feel like they’re just randomly and arbitrarily spending tax money on some band-aid fixes that sometimes causes more traffic (and injury).  The Unified Vehicle Volume Reduction Program, more popularly known as the Color Coding Scheme, is pretty much a limitation of our liberty to travel using our hard-earned vehicles.  It doesn’t even apply to all the cities.  

I could go on and on but I think we all know what a complicated, inexplicable, tangled web we’ve created for ourselves, and it’s going to take a very long time to unravel it.  In the meantime, many Filipinos are just escaping it.  Some without the intention of looking back or returning, others with the hope that when they return, everything has been fixed.