22 February 2006
Opinion: Business costs
AFTER ALL
Behn Fer. Hortaleza, Jr.
THERE’S something in that seemingly minor news item about Dagupan City’s recently being awarded as one of the Most Competitive Cities in the Philippines for ‘small cities’ category.
The award was conferred on top performing urban centers by the AIM Policy Center in ceremonies at the Intercontinental Hotel in Makati with Vice Mayor Alvin Fernandez and several city aldermen receiving it on Mayor BSL’s behalf
Somewhere in the bottom lines of the news release by the City Information Office, it said the city ranked 31st in terms of the “cost of doing business.”
Now that’s a rather unsettling compliment as there were actually only 37 “small cities” evaluated. That meant we were down in the cellar with five others. But of course in the overall rankings for that category, we still made it among the country’s best.
The question begs: Is doing business in Dagupan really rather “too costly?” Juxtapose this with a news item this week, also from the CIO about the Quezon City treasurer’s discourse to Dagupan officials last week on the “trade secrets” for a robust financial health among cities, foremost of which is an improved (read: more) business tax collections by a local government unit.
Also, put the question alongside the stratospheric taxes and fees being implemented by Dagupan just this year for business permits (thanks but no thanks to the Revised Revenue Code of 2006) and you already probably have the answer—in the affirmative.
We scrutinized every word by the QC bursar in the news item and we seem to have missed reading in them any piece of advice about fiscal restraint on excessive ‘festival expenses’, ‘consultancy service fees’ and ‘donations’ to civic clubs and assorted mendicants among them. Quezon City probably is also doing the same with aplomb, so it can’t afford to shoot its mouth off on that. Or, maybe, shoot its foot is more to the point.
* * * * * * *
One more thing: Treasurer Victor Endriga of Quezon City talked about something like ‘presumptive income level’ as basis for tax rates which, to our layman’s understanding, is simply something like the cops’ “plain view” doctrine in searching houses, establishments or vehicles for inspection. You presume that if you don’t see anything irregular or plain sight, you don’t have to dig deep or ask further.
On the other hand, it could also mean the city and its taxmen have the right to presume you earn this much just by looking at your style of dressing and the places you go to – or the kind of entertainment houses you frequent. Presumptive, see? It’s probably the fancy cousin of the phrase ‘unexplained wealth’.
* * * * * *
Now since we started the subject, we had a talk with a businessman-fellow blogger (if you don’t know that term, ask your friendly computer-junkie or the neighborhood cyber-technology expert) last Thursday and he believes the cumbersome (tiresome, longwinded, confusing) procedures for paying taxes to this government is what’s turning off many from settling their tax obligations, or somehow cheating on these.
“Why not a flat rate applicable to all who fall under the same category, and no more questions asked?, he queried out loud. He cited Vietnam and even we think, Ireland as among the countries that have achieved economic miracles largely due to their ‘practical’ tax laws.
As it is, the internal revenue guys here have become so accustomed to putting so many ifs and buts in their tax rules, a simple tax payer is liable to fall guilty of offenses one way or the other out of sheer ignorance of the rules. When he does, the BIR is only too glad to slap the penalties on him. And the wily accountant besides would only be too happy to “fix” the problem for the confused taxpayer if the price is right. Any which way, the taxpayer gets it in the neck.
Besides, our friend added, with a ‘flat rate” taxing system, “di na sila mahirapang magkwuenta ng magiging koleksiyon nila. Kung 10 percent, di 10 percent. Mas madali.
Okay, okay, we know how the BIR chaps would answer that: Hindi ganun kadali.
So, which comes first, the chicken or the egg?
Behn Fer. Hortaleza, Jr.
THERE’S something in that seemingly minor news item about Dagupan City’s recently being awarded as one of the Most Competitive Cities in the Philippines for ‘small cities’ category.
The award was conferred on top performing urban centers by the AIM Policy Center in ceremonies at the Intercontinental Hotel in Makati with Vice Mayor Alvin Fernandez and several city aldermen receiving it on Mayor BSL’s behalf
Somewhere in the bottom lines of the news release by the City Information Office, it said the city ranked 31st in terms of the “cost of doing business.”
Now that’s a rather unsettling compliment as there were actually only 37 “small cities” evaluated. That meant we were down in the cellar with five others. But of course in the overall rankings for that category, we still made it among the country’s best.
The question begs: Is doing business in Dagupan really rather “too costly?” Juxtapose this with a news item this week, also from the CIO about the Quezon City treasurer’s discourse to Dagupan officials last week on the “trade secrets” for a robust financial health among cities, foremost of which is an improved (read: more) business tax collections by a local government unit.
Also, put the question alongside the stratospheric taxes and fees being implemented by Dagupan just this year for business permits (thanks but no thanks to the Revised Revenue Code of 2006) and you already probably have the answer—in the affirmative.
We scrutinized every word by the QC bursar in the news item and we seem to have missed reading in them any piece of advice about fiscal restraint on excessive ‘festival expenses’, ‘consultancy service fees’ and ‘donations’ to civic clubs and assorted mendicants among them. Quezon City probably is also doing the same with aplomb, so it can’t afford to shoot its mouth off on that. Or, maybe, shoot its foot is more to the point.
* * * * * * *
One more thing: Treasurer Victor Endriga of Quezon City talked about something like ‘presumptive income level’ as basis for tax rates which, to our layman’s understanding, is simply something like the cops’ “plain view” doctrine in searching houses, establishments or vehicles for inspection. You presume that if you don’t see anything irregular or plain sight, you don’t have to dig deep or ask further.
On the other hand, it could also mean the city and its taxmen have the right to presume you earn this much just by looking at your style of dressing and the places you go to – or the kind of entertainment houses you frequent. Presumptive, see? It’s probably the fancy cousin of the phrase ‘unexplained wealth’.
* * * * * *
Now since we started the subject, we had a talk with a businessman-fellow blogger (if you don’t know that term, ask your friendly computer-junkie or the neighborhood cyber-technology expert) last Thursday and he believes the cumbersome (tiresome, longwinded, confusing) procedures for paying taxes to this government is what’s turning off many from settling their tax obligations, or somehow cheating on these.
“Why not a flat rate applicable to all who fall under the same category, and no more questions asked?, he queried out loud. He cited Vietnam and even we think, Ireland as among the countries that have achieved economic miracles largely due to their ‘practical’ tax laws.
As it is, the internal revenue guys here have become so accustomed to putting so many ifs and buts in their tax rules, a simple tax payer is liable to fall guilty of offenses one way or the other out of sheer ignorance of the rules. When he does, the BIR is only too glad to slap the penalties on him. And the wily accountant besides would only be too happy to “fix” the problem for the confused taxpayer if the price is right. Any which way, the taxpayer gets it in the neck.
Besides, our friend added, with a ‘flat rate” taxing system, “di na sila mahirapang magkwuenta ng magiging koleksiyon nila. Kung 10 percent, di 10 percent. Mas madali.
Okay, okay, we know how the BIR chaps would answer that: Hindi ganun kadali.
So, which comes first, the chicken or the egg?
