‘The tax man cometh’

There are only two things that are constant in life – death and taxes. It’s a bit morbid but unfortunately incredibly true. Now that the solemnity and prayers of Holy Week have passed, it’s back to life in the real world. The break gave us all a much-needed breather from the stress of every day life. The crowd-less traffic-less Metro Manila was such a joy, but all that ended as quickly as it began with vacationing families coming back into the city in droves.

The break is definitely over and we are back to regular programming – bad news on a regular basis, balimbing politicians, mudslinging among candidates, and of course the upcoming elections in May which will undoubtedly usher in another round of name calling and scandal revealing craziness as politicians struggle to hold on to power while candidates strive to take it from them.

However, before all of that happens we have April and that means only one thing – tax season. Although let’s be real, in the Philippines it feels like it’s tax season all year long. It’s in April though that we are truly reminded of what we paid and what we owe. No working man or woman can escape paying taxes and I believe I’ve said in many previous columns that it’s not the concept of taxes that is so disturbing it’s the concept of where our money actually goes.

In a perfect world, people pay taxes and the government uses these taxes to provide the people with goods and services that they need in every day life. Taxes fund government programs that make life easier for the citizens. Taxes should theoretically go to things like infrastructure, education, healthcare, and the like.

However, corruption is something that we can’t deny and especially worse here in the Philippines and it’s not ridiculous to think that our taxes haven’t really gone to any of those things over the years. That’s why the pork barrel scam was so revolting to so many because it only confirmed where the bulk of our taxpayers’ money goes – into grand mansions, fancy trips, and luxury cars for those in power instead of towards helping the people or the country. It’s no wonder that we have had the highest income tax rate in all of Asia and yet we rank so low in terms of basic human needs met.

Personally, I understand why people complain. I know I complained my share. However, I want to believe that it’s not too late to make our taxes count for something. After all, these payments you make and even your contributions to PhilHealth and SSS will benefit you in the long run. It’s like making an investment and reaping the rewards much later in life. Again though, that’s assuming your contributions/taxes go where they should.

The Duterte administration has already begun their tax reform program through the TRAIN law (Tax Reform for Acceleration and Inclusion) and while this has lowered income tax it has also increased the costs of basic goods. In the end does the extra take home pay simply get funneled back into basic necessities? It certainly does seem like it. Which makes the law somewhat useless and basically just a hollow way of saying that you are lowering income tax. Tax reform needs to be holistic in order to actually work. If you are taking home and extra thousand a week but your gas now costs a thousand more it’s as if nothing happened. From what I have heard, sometimes you end up spending even more.

The same goes for Social Security. Because of the long-awaited and much-needed pension rate increase there has been added pressure on SSS to find more sources to be able to support the fund. Many claim that the fund’s life is going to be drastically cut with the roll out of the new rate. This is worrisome, yes, but the hike is necessary. The pension rate prior to the increase was something that senior citizens couldn’t live on in their golden years – especially with the high cost of health care and lack of good coverage.

Now, SSS is claiming that the current tax reform supports their proposed hike in SSS contributions. While I don’t think it’s completely unfair to raise contributions (because again – you will reap the rewards of your sacrifices in your later years), I do think it’s unfair to tack that on to the existing tax reform – which in itself is not exactly what it seems. With higher costs of basic goods and higher SSS contributions that lower income tax will have been for nothing.

The financial minds in the government need to go back to the drawing board and figure out how to make this work to the benefit of the many. Or at the very least explain how it all works in the present. Like myself during my 9-5 years, I don’t think people will be adverse to paying taxes and making their necessary contributions if they knew exactly where they were going and that they would benefit from them in the end.

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Ride sharing services Grab and Uber made headlines last week due to the news of their apparent “merger” or sorts in Southeast Asia. Uber decided to quit operations in the region and sold their shares to Grab (after everything we put Uber through here in the Philippines can we really blame them?). While the two companies tried to create positive headlines about this deal (bigger fleet, better service, etc), commuters see it for what it really is – a duopoly becoming a monopoly. And that can only mean the opposite of what they are promising – higher rates and less incentives.

The loss of Uber hit commuters particularly hard because they have been claiming that Grab is falling under the same problems that plague local taxies – refusal of rides (canceling of rides), lack of options, and just a general sense of not caring. While Uber was present at least Grab had competition to worry about that, at the very least, kept the company on their toes. Now with Uber gone how long will it take for Grab to backslide even more?