Flat tax
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Let me tell you how it will be
There's one for you, nineteen for me
Should five percent appear too small
Be thankful I don't take it all
If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk, I'll tax your feet
Don't ask me what I want it for
If you don't want to pay some more
Now my advice for those who die
Declare the pennies on your eyes.
--Excerpts from "Taxman", George Harrison
FORMER juvenile delinquent and now preacher Grepor "Butch" Belgica, my friend since the 1980s, was in town because of a "camp meeting" in Opol, Misamis Oriental, last week. The last time we rubbed shoulders was at a dinner with President Arroyo in Marikina hosted by the now embattled Metro Manila Development Authority (MMDA) chair Bayani Fernando. That was the night immediately after the President delivered her state-of-the-nation address (Sona) before the 2004 elections.
We talked for hours last week and I learned that his group, the National Reform Association (NRA), is lobbying for tax reforms in the country. Helping Bro. Butch, as he is fondly called, in the NRA are former justice undersecretary Joe Calida who chairs the group's board, and retired generals Honesto Isleta, JV Laurilla and Ramberto Saavedra, and lawyers Clinton Laudencia and Deborah Daquis, among others. Former cabinet members Renato de Villa and Joey Lina are among NRA's advisers.
It doesn't surprise me that a preacher like Bro. Butch is actively involved in politics. For one, he is or was a politician; he used to be a councilor representing the 6th District of Manila. I was told that aside from tax reforms, he is also strongly lobbying against the controversial bill on responsible parenthood and population management. From where he sits, politics--or public service--is a Christian ministry.
I see some logic in the flat-tax system which Belgica is proposing. His group has come out with a paper which I think deserves to be seriously looked into by the government, particularly by the executive and legislative departments.
Although somewhat "religious" (the NRA's proposed flat-tax system is based on the tithing principle being taught by many non-Catholic churches), the proposal appears to be very sound.
The NRA proposal is crisp and simple: apply a uniform tax rate for all sources of income, whether personal or business.
For instance, if two taxpayers earn the same amount of money in different ways, the NRA paper says they should pay the same amount of tax to the government.
The rate, according to NRA, should not be over 10 percent. "Why should the government collect more than 10 percent when God is only asking 10 percent?" says Bro. Butch, comparing government-imposed taxes and tithes paid to churches.
The NRA believes its proposal would make taxation simple, fair and efficient.
The NRA paper cited Russia where people with earnings of not more than 4,800 rubles enjoy tax exemption. Needless to say, those earning more than 4,800 rubles are taxed based on the uniform rate of 13 percent.
The tax reform of 2001 worked for Russia, says Belgica, as evidenced by the growth of its gross domestic product--5.1 percent in 2001, 4.7 percent in 2002 and an impressive 7.3 percent in 2003. The NRA says the average annual real growth in Russia in the last three years averaged 5.5 percent which is definitely much better than the growth of many developed countries.
NRA thinks the present tax system in the country is grossly unfair because it sends out a message that "success is a crime we must punish". It also thinks that the present set-up breeds legalized theft and "robs Peter to pay Paul".
NRA complains: Your small business gets off the ground, or you land a higher paying job as a reward for upgraded skills, only to be pushed into a higher bracket of increased tax.
I'll give copies of the NRA paper to our very own Sen. Nene Pimentel and Cagayan de Oro Rep. Tinnex Jaraula the next time I see them. Congress should have given this proposal a very serious look before the bright boys even thought about battering the Filipino nation with Malacanang's killer VAT.
Pastilan.
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