Tax to go

BIR Commissioner Kim Henares’ casual remark on a DZMM radio program calling for the abolition of the community tax certificate (CTC) has evolved into a modern day “Cry of Balintawak”. This is a four cents proposal which makes historical and practical sense. 

Apparently the CTC traces its roots to the tributes extracted from the native indios during the Spanish times. It morphed into the cedula which was issued to persons between the ages of 18 and 60 as a form of a residence tax. As the payment for these cedulas increased over the years, it became a symbol of colonizer oppression and abuse. In an act of defiance to Spanish rule, Andres Bonifacio and fellow Katipuneros publicly tore their cedulas during a meeting held in Balintawak (now a part of Quezon City) in 1896. This event is historically remembered as the Cry of Pugad Lawin which marked the start of the Philippine revolution.    

The collection of a residence tax was suspended by the Americans for over 40 years but reimposed in 1940. It was kept in effect after we gained independence in 1946 although the residence certificates were re-named community tax certificates in the 1991 Local Government Code and with the bulk of the proceeds now going to the local government units’ coffers. But if these taxes were viewed as “tributes” or “symbols of oppression”, query as to why we should continue the practice in the first place?

From a practical standpoint, this certificate is supposed to serve as a primary means of identification which should contain the name, height, weight, tax identification number, place and date of birth, nationality, civil status and occupation or calling of the individual. But not only is this information provided by the applicant (and therefore can be falsified) it is also not accompanied by any identifying photo. So it is quite easy to use another person’s or a fictitious CTC number. As a result, while the CTC continues to be a valid form of identification for those who acknowledge a document before a notary public, takes an oath of office, receives a license or permit from a government authority or even pays taxes, it is no longer admitted for purposes of voter registration and the opening of bank accounts. Given its inherent unreliability, I surmise that less government agencies will be accepting the CTC as a form of identification in the future.  

Does the CTC system promote honesty and efficiency in society? In theory, the CTC must be paid by every Philippine resident who is at least 18 years old and with any of the following characteristics:

I.  Employed for at least 30 working days;

II. Engaged in business or occupation;

III. Owns real property with an assessed value of P1,000; or

IV.  Required to file an income tax return.

The basic community tax rate for individuals is P5.00 plus an additional P1.00 for P1,000 of income from any source, including property income (e.g. rentals and leases).

For example: the community tax due from a resident with a P500,000 annual income is computed as follows:

Basic tax rate:       P    5.00

Additional tax rate:      P500.00

Total tax:            P505.00

The ceiling on the maximum amount of the community tax to be paid an individual is P5,000 per year.

And yet query how many individuals still actually get a CTC or pay the right amount for that matter? Moreover, how are the monies collected by the LGUs spent? Are they actually used for projects that benefit the community or do they merely line the pockets of our local government officials? Indeed, it is time to really look into creating a national ID card that will contain reliable information which can be safeguarded and not abused.

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Urgent appeal: Let me lend part of my space to an appeal of recent bar passer Adriana Uson addressed to 2013 Bar Examinations chairman, Justice Martin Villarama.

In March 2012, I graduated from the La Salle-FEU and MBA-JD Program. And was subsequently fortunate to have been included in the list of 949 successful bar examinees. Since then, I, along with my very proud family, have been looking forward to my taking the Lawyer’s Oath and signing the Roll of Attorneys. After half a decade of gruelling legal studies, I was only weeks away from finally joining the ranks of the legal profession.

On April 8, 2013, while I was obtaining my clearance from the Office of the Bar Confidant, I was provided a copy of a letter submitted to the OBC by my father’s former business partner, Flordeliza Uy, alleging that because of a Complaint-Affidavit that was filed before the Caloocan Prosecutor’s Office against me and my family, I was disqualified from being admitted to the bar. I was devastated, in large part because I did not want to deprive my family of the once-in-a-lifetime opportunity of seeing the fruit of their years of toil taking her oath at the PICC Plenary Hall.

The complaint by the Uy family against me is designed to harass on account of their unfounded perception of having been taken advantage of by my father. In any event, regardless of the merits of their business claims, the proper remedy for resolving those is in court and not in barring me from joining a profession whose ideals I share and whose objectives I have committed to pursue. The merits of my and my family’s defense in the case filed against us by Flordeliza Uy are fully discussed in the attached Comment that I filed with the OBC yesterday.

Honorable Justice, I am writing this letter because the Court will soon be going on recess. My only wish is for the Court to hear my case and give me the opportunity to prove that I am not disqualified from taking the Lawyer’s Oath on April 24. I sincerely hope that you may be able to support my efforts to be heard. Should your schedule permit, I would be very willing to go anywhere anytime to further discuss the conundrum that I am in.

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“We don’t seem to be able to check crime, so why not legalize it and then tax it out of business?”   - Will Rogers 

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