Taxed to death

“In this world, nothing can be said to be certain except death and taxes.” This is one of the most famous quotations from Benjamin Franklin. It may be an exaggeration but that’s how fixed income earners like us feel the way we’re being taxed by the Bureau of Internal Revenue (BIR). As the chief tax-collecting agency of the government, the BIR has prior claims to fixed income earners like us through the withholding tax system.

There are proposed bills currently going through the legislative mill at the 16th Congress. Hopefully, they finally gain traction to become law sooner than later. Last week, the House committee on ways and means approved a bill that exempts 13th month pay and other bonuses of workers up to P70,000 from income tax.

Marikina City Rep. Romero Quimbo, chairman of the House panel, steered the approved measure from a consolidation of some 11 House bills that sought to amend Section 32 of the National Internal Revenue Code.

According to Quimbo, the P70,000 maximum amount of the proposed tax-free income was based on economic data from the National Statistics Coordinating Board adjusted for inflation since the existing exemption was pegged at P30,000 in 1994.

Several counterpart bills are also being pushed at the Senate filed by Senators Sonny Angara and Ralph Recto.

The Senate, however, would have to wait for the approval first of the House tax bills in accordance with the mandates of the country’s Constitution that all proposed revenue measures must emanate from the House of Representatives.

Angara filed Senate Bill (SB) and SB No. 2157 seeking higher tax exemption for the 13th month pay from the current P30,000 to P75,000. He also filed a complementary measure under SB No. 2149 that seeks to adjust the existing income tax brackets and to lower the maximum tax rate from 32 percent to 25 percent for withholding tax income.

Present laws exclude the mandated 13th month pay and the Christmas bonus from the coverage of income taxes, but only up to the extent of P30,000. Any amount in excess forms part of an individual’s gross income and therefore subject to the operation of the National Internal Revenue Code.

Angara rightly noted it has been 17 years since the Revenue Code was enacted and yet, the country’s tax system has not been amended since. A tax expert concurred that tax brackets should at least be adjusted every three years.

The Finance Department and the BIR cautioned lawmakers that the government stands to lose at least P43 billion by 2017 if SB 2149 will be passed. Testifying before the House committee public hearing on the proposed bills, Finance Undersecretary Jeremias Paul admitted, however, this figure is only a rough estimate.

From BIR’s own record, however, it shows individual taxpayers whose payments are automatically withheld comprise only 16 percent of the estimated taxpaying population yet contributes to 85 percent of their agency’s collections.

Much money are taken away from the fixed income earners like us while many get away with tax-dodging and tax-shaving schemes. How can President Aquino’s economic slogan of “inclusive growth” take place in real terms?

It will be better for the economy if people have more disposable income to increase their purchasing power and savings. More purchases of goods and services that are subject to 12 percent value added tax (VAT) would mean more revenues for the government.

When we got our pay slip and saw the salary increase and bonus we all received at The Philippine Star anniversary last month, our elation was short lived. After seeing the huge withholding tax deductions that ate up as much as one third of our hard-earned income, it saddened us to see we could not feel any “inclusive growth” at all.

Speaking of sadness, our very dear friend and colleague, Antonio “Tony” Paño, 53, passed away last Friday night. He succumbed to colorectal cancer a few weeks after his surgery. Tony was one of the hardworking associate editors of The Star who daily toiled to close The Nation page and editor of the Science & Technology, Tourism and Telecom & Networks sections.

Tony is survived by his sisters, brothers and octogenarian mother whom he loved so dearly and doted on. She is the only reason for Tony’s absences in office whenever she fell ill. Tony had been the chief financial provider to his family.

Tony never got to raise his own family. But he was able to send to school nephews and nieces and even non-family members whom he unselfishly helped.

To me, Tony was not only a fellow Star trooper. He was also like a “brother” and shoulder to cry on. But most especially, Tony was my “5-seconds laughter” buddy and self-effacing tandem every Saturday duty in closing the front page of The Star for the next day.

I know Tony keeps a collection of key chains around the world. Most of them were from his travels abroad and “pasalubong” given to him by friends and colleagues. I am privileged to be one of his close friends during his lifetime cut short by cancer.

Tony is one of the rare breed of “editor’s editor” who rose from the ranks. As a beat reporter before, Tony knew how it feels when a reporter’s copy is badly mangled by editing. Tony’s last wish was to have his remains cremated.

We will miss Tony’s generosity and thoughtfulness. Even without any occasion, he would give me plants in small pots supposedly for office display. He knew my love for gardening hobby. Some wilted already except for the “money tree” that I planted in my garden at home, all of which now are full grown. I shall treasure these “green” memories from Tony. I could just imagine he is chortling from where he is now on this impromptu eulogy I wrote for him.

Tony’s demise came a few days after our Bulacan correspondent Dino Balabo suffered a sudden cardiac arrest due to his diabetic condition. Dino’s news dispatch about the scheduled court hearing last Monday of ex-Gen.Jovito Palparan at the Malolos court landed on The Star front page. It turned out to be his last. Dino was one of the more reliable and best correspondents of The Nation page edited by Tony.

Sadly, that was two deaths in a row for us in The Star family in a matter of four days apart.

As we go on with our lives and work to earn a living, we could not help but muse on our mortality. We work hard only to be virtually taxed to death.