The taxman cometh: No escape

Herbie Gomez

“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.” -from Taxman, The Beatles’ Revolver album, George Harrison, 1966

WHAT good will the tax exemption for low-income earners be if the only way they can enjoy their taxation-free and higher take-home pay is for them not to buy anything at all?

The new year started with the Department of Finance warning fuel companies against profiteering. It said the fuel-price increases last week was not a result of the Duterte administration’s Tax Reform for Acceleration and Inclusion Act or “Train.”

On Twitter, the finance department stated two Sundays ago: “The increase is not expected to take effect immediately on Jan. 1 as it takes a few days for the 2017 oil stock to be used up.”

Yet, fact is, fuel prices shot up last week.

The DOF advised oil companies: “Please ensure and advise your dealers that pump prices should only reflect stocks that have actually had the new excise tax rates imposed. Old stocks should be sold on the old excise rate or at zeroated excise tax for diesel product.”

In effect, the DOF merely said, Not yet. But what happens after the old stocks are sold out and the government starts imposing the excise tax at the port of importation or refinery? Boom.

Because of this new tax law signed by President Duterte last month, the prices of regular and premium unleaded gas would shoot up by P7 a liter this year, P9 next year and P10 by 2021. Diesel prices would go up by P2.50 a liter this year up to P6 by 2020. The fuel we use for cooking would also increase by P1 a year.

And we’re just talking about fuel prices.

Most people won’t mind seeing those engaged in mining paying twice as much as what they are paying the government now. No matter which angle you look at it, they are destroying the environment. And so, tax them good and give ’em hell.

And never mind if the so-called “sin taxes” shoot up to astronomical levels. Come to think of it, people can live without tobacco. Maybe, it’s time to kick the bad habit. There is really no moral justification for vices.

People can also live without cosmetics and so, go ahead, tax them. (Sorry, women.)

The automobile tax would hurt the chances of workers to finally have cars of their own. Many will just have to make do with the jeepney and other public vehicles until the day they die.

The sweetened beverage tax is one way for government to tell citizens, in effect, to just drink water. Society has been used to the idea that only licensed medical practitioners, and preachers with all sorts of food doctrines can tell people what they should be drinking or eating without being offensive. And so, there is something repulsive when politicians tell citizens what they can and what they cannot drink to quench their thirst. This tax can also be seen as restrictive by many. Mind you, I have seen children eating rice mixed with nothing but coffee (the three-in-one type) for breakfast because their families cannot afford to buy normal meals.

The coal excise tax will hurt given that the government has allowed us to become dependent on coal-fired power plants for our energy requirements. In fact, last year, President Duterte was here to grace the launch of another coal-fired power plant. Sooner or later, the power producers and distributors would find a way to pass this tax burden on us, the power consumers.

And the petroleum excise tax? Oh, that would hurt the pocket. By now, everyone knows that fuel-price increases have a domino effect on the prices of food and practically, everything.

If the government really wants to improve the living conditions of many Filipino families, what it should be doing is lowering their tax burdens to the minimum. The tax exemption for low-income workers is really good but government has to complement this by ensuring that its citizens’ everyday spendings are low, too. You don’t expect the worker to be happy if a huge chunk of his tax-free take-home pay is spent on electric and water bills, and home-to-workplace and workplace-to-home jeepney fares. Now, imagine the look on his face when he realizes that he has to pay more now for the canteen food and his favorite eight-ounce soft drink!

It would be wise for the Duterte administration to review and fine-tune this new tax reform package. The moment the prices of food and other commodities people cannot really live without increase by leaps and bounds, it will really hurt and soon, citizens will realize that their higher tax-home pay is only meant to sugarcoat the sad reality that no one can really escape the state’s power of taxation regardless if the taxes are outrageously excessive or not. Pastilan.