The growing list of obvious tax evaders

To sustain the country’s economic growth, apart from calls for fresh investments (foreign and domestic), there is a need to go for state-funded infrastructure projects. Thus, the “Build, build, build.” Accordingly, the national government is running on a tight budget. So that, given such predicament, the Bureau of Internal Revenue (BIR) and the legislators are exploring all possibilities imaginable to meet revenue targets.

In meeting revenue targets, among those recently considered were the amnesties for estate taxes and income taxes. Moreover, more products have been considered for “sin taxes.”  Curiously, the possible reduction of incentives currently enjoyed by PEZA- and BOI-registered companies is also considered.

Indeed, all these years, except for the possible reduction of incentives, same scenarios have happened. It’s either existing tax rates are raised or an amnesty is offered. Put simply, same old taxes with higher rates, voluntary payments and tighter inquiries on the same old taxpayers like legitimate businessmen and professionals. As expected, the raise isn’t as much.

Therefore, it is about time that we should look into some groups of earning businessmen who are seemingly tax exempt. Actually, some of them are easily identifiable.

On top of the list are our street entrepreneurs a.k.a. “sidewalk vendors.” These entrepreneurs are selling their wares, like bootleg DVDs, fake designer-garments, etc. on the streets.

These items, depending on where these are made or plagiarized, find their way to the Philippine market either through wicked importers or smugglers. These items are undocumented and sneaked into the country through the backdoor. Since legitimate business establishments demand for BIR-registered receipts, these items seldom go through the normal distribution channels like department stores or specialty shops.  Finding difficulties through legitimate channels, these unscrupulous beings found some advocates in our sidewalk vendors.

Incidentally, calling them sidewalk vendors isn’t degrading but an understatement.  It is a fact that most of them have entrepreneurial smarts. They are selling their wares on the streets by choice and have only preferred to be labeled as such (sidewalk vendors) to justify their tax-free existence. Most of them never went for employment because they chose to become employers themselves. Sadly, despite all these opportunities, they have remained tax-free.

Then, there are motorcycle-riding Indians who ply their lending businesses from one stall to another on a daily collection basis. Ironically, these tax-exempt individuals are using roads that are built and maintained by honest taxpayers’ money. Through the manner by which they carry out their businesses, interest charges are certainly higher than banks, pawnshops and lending investors. Yet, they never drop even a single cent to our government coffers. Obviously, they are everywhere and too many to be missed. Therefore, identifying or taxing them isn’t difficult to do.

These Indian lenders should show respect on us Filipinos. They should realize that they are taking advantage of our hapless brothers’ helplessness by sucking sizeable interests from their meager earnings. At least, they should show respect by registering their lending businesses. Otherwise, the BIR should conduct surveillances and apprehend these Indian lenders red-handed.

Not to be outdone are the online sellers or retailers. Probably, they are even earning more than the street entrepreneurs. With the advancement in technology, more and more entrepreneurs are doing business through the net. Collectively, by now, the volume could run to hundreds of millions a year or even billions. Yet, most of them remain tax-free.

Finally, the Airbnb. This group of entrepreneurs is really raking in thousands a day for every unit that they have. Yet, most of them, or, probably, all of them, remain tax/free. Worse, their number is growing day by day and our hoteliers are feeling the pinch.

Indeed, there is too much inequity in our tax system. If these street entrepreneurs, Indian lenders, online sellers or retailers and Airbnb operators remain negligently tax-exempt, then this government has no moral ascendancy to continuously withhold taxes from the loan shark-battered and meagerly-waged workers and employees.