Unusual times

These are indeed unusual times.

The Indonesian stock market, one of those suspended last week due to southward trading in a worldwide market meltdown, will open today – a Sunday. Most businesses usually close on this day, but the Jakarta bourse is trading today.

And the US by Monday could be buying bank stocks for the first time since the Great Depression to help calm down the market.

Let us take some time to laugh while we still can.

Thanks to Tony’s blog for this new dollar bill:

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Contrast

We have seen the closure of banks, financial institutions and insurance companies the past several months in the US, Europe and lately Japan as a result of the global financial crisis.

The opposite, however, is occuring here in Davao. Almost a new bank branch is being opened here every month. Yesterday, it was the First Consolidated Bank based in Tagbilaran, Bohol, which started operations at its sprawling center at Sasa. Last August, I also represented Mayor Rody Duterte at the opening of the East-West Bank infront of high-end shop Chimes along Sales St. in Chinatown. East-West Bank is opening another branch at Matina just off Ateneo very soon.

Last month, the long idle Madrazo property infront of Central Bank finally gave way to a new bank branch of Philsavings.

Davao is not immune to the financial crisis and the impending global recession but it is faring well, according to NEDA.

My pay slip

Ever wonder how much elected city councilors make?

These are the entries in my pay slip for this month:

Earnings – Monthly Salary P25,764.00; Personal Emergency Relief Allowance (PERA) P0.00; Additional Compensation P1,500 – Total P27,264

Deductions – GSIS Life & Retirement Insurance P2,318.76; Home Development Mutual Fund Premium P100.00; Medicare P312.50; Withholding Tax P3,836.60; PAG-IBIG Loan P617.46 – Total P7,185.32

Net Pay – 1st Week P5,019.00; 2nd Week P5,019.00; 3rd Week P5,019; 4th Week P5,021.68 – Total P20,078.68

Not much huh? This should belie popular perception that politicians make a killing such that many poor people line up at our offices and homes for financial aid.

Ha, ha, ha. At P20,000 a month, councilors are in fact receiving lower than the ideal living wage of at least P1,000 per day for a family of six.

This pay slip was released last July 1 or prior to the effectivity of the new law exempting minimum wage earners from income taxes and increasing the personal exemptions and additional deductions on those earning higher income.

So, employers need to adjust their computations on all their employees to comply with this new law on withheld taxes. Mine is P3,836.60 a month. I am a public servant and yet the government takes away from me this much per month.

It is estimated that this non-wage benefit would add at least P34 per day to the take home pay of minimum wage earners. Unfortunately, the galloping inflation rate has eroded the same before workers could enjoy this benefit. Inflation in June was recorded at 11.4 percent, the highest since 1994.

6:15 a.m.

Huge loss

How much will Davao City lose in its share of the Internal Revenue Allotment (IRA) for this year as a result of the creation of more cities in the country?

P194 million.

Yup enough money for our sports complex or a start up capital for our city college or city hospital.

BIR wants LGUs as its Gestapo

The Bureau of Internal Revenue or BIR missed its tax collection target last year by P53.8 billion. It failed in its goal across the board – value-added tax (VAT) short by P38.187 billion; income tax by P9.715 billion; percentage tax by P4.098 billion; and excise tax by P3.915 billion.

Congress is now investigating this biggest tax collection failure in the country’s history.

As a kneejerk reaction, BIR has issued a new Memorandum dated January 8, 2008 mandating local government units or LGUs not to issue or renew business and professional permits without first submitting a number of BIR requirements.

This memo was advertised in leading newspapers only today; the period for business permit renewals ended yesterday.

First, the Memo is clearly late. Renewal of business permits has commenced on the first working day of the month. And I got a report from Atty. Jhopee Agustin of the Business Bureau that the business licensing went smoothly.

Second, requiring applicants to comply with the many BIR requirements such as copies of the Income Tax Returns, monthly and quarterly Value-added Tax Returns, etc. smacks of red tape to say the least. Putting more obstacles to professional and business applicants is contrary to our policy to limit bureaucratic requirements and hasten the processing of such permits.

Third, this BIR policy would only encourage businesses not to seek permits and to go underground, thereby negating our efforts to register all businesses in the city or in the country for that matter.

I believe that the BIR should squarely admit the blame for its own failures. It should not pass on the burden of collecting taxes to the LGUs.

In a sense, the BIR wants LGUs to play Gestapo to apply state terror on professionals and businesses applying for their permits.

This is most deplorable and highly objectionable.

I am certain that LGUs would want to help the BIR in its tax revenue efforts. But certainly, not this bullying way.

Almost 99 percent of about 40,000 business registrants in the city are micro and small and medium enterprises or MSMEs. They may seem to be lowly businesses but they contribute highly to jobs generation and taxation. They are the asset that makes our city grow. They are our development partners.

I believe that we should treat them fairly and not be burdened with so many regulations and requirements.

In missing its collection target last year, BIR has clearly shown its folly and bias.

The biggest failure in last year’s missed collection goal was the Large Taxpayers Group of the BIR. This group handles taxes for the Top 1,000 corporations. This group failed to collect P38.8 billion from the big businesses. From its target of P469.7 billion, this group collected only P430.9. This shortfall represents 70 percent of the total missed target of the BIR.

Who heads this special group? No less than the BIR Commissioner herself, Lilian Hefti.

Here is my advise to her. Run after tax evaders! Collect from the rich and big taxpayers first, before pounching on the small fries! And do your job first before ordering LGUs how to do theirs!

(9:12 a.m.)

Top 40

Here are the richest Pinoys listed by Forbes Magazine and reported by Philstar.

I am surprised that Senator Manny Villar is listed as richer than Metrobank’s George Ty, Jollibee’s Tony Tan Caktiong, SanMig Boss Danding Cojuangco, and JG Summit’s John Gokongwei, among many other taipans and tycoons.

He is more than ten times richer than the Alcantara’s of Davao.

1. Jaime Zobel de Ayala and family ($2 billion)

2. Henry Sy and family ($1.7 billion)

3. Lucio Tan and family ($1.6 billion)

4. Andrew Tan ($1.1 billion)

5. Manuel Villar ($940 million)

6. George Ty ($870 million)

7. Andrew Gotianun ($860 million)

8. Enrique Razon Jr. ($820 million)

9. Tony Tan Caktiong and family ($790 million)

10. Oscar Lopez and family ($775 million)

11. Vivian Que Azcona and family ($670 million)

12. Inigo and Mercedes Zobel ($660 million)

13. Eduardo Cojuangco Jr. ($540 million)

14. Emilio Yap and family ($445 million)

15. John Gokongwei Jr. and family ($430 million)

16. Enrique Aboitiz and family ($375 million)

17. Alfonso Yuchengco and family ($365 million)

18. Beatrice Campos ($220 million)

19. David Consunji and family ($210 million)

20. Luis Virata ($200 million)

21. Gilberto Duavit Jr. and family ($191 million)

22. Menardo Jimenez and family ($190 million)

23. Felipe Gozon and family ($165 million)

24. Mariano Tan and family ($140 million)

25. Ramon del Rosario Jr. ($137 million)

26. Ronaldo and Rosalinda Hortaleza ($110 million)

27. Manuel Zamora ($105 million)

28. Betty Ang ($100 million)

29. Tomas Alcantara and family ($90 million)

30. Frederick Dy ($70 million)

31. Wilfred Steven Uytengsu Sr. ($60 million)

32. Salvador Zamora ($55 million)

33. Oscar Hilado and family ($51 million)

34. Philip T. Ang ($50 million)

35. Magdaleno Albarracin Jr. ($49 million)

36. Jesus Tambunting ($47 million)

37. Antonio Roxas ($36 million)

38. Manuel Pangilinan ($35 million)

39. Marixi Rufino-Prieto and family ($33 million)

40. Lourdes Montinola ($30 million)

 

(6:55 a.m.)

Short across the board

Heads should roll on this disappointing performance, or more precisely, lack of it.

Tax collection last year was short by P53.8 billion, the biggest in the country’s history.

The Bureau of Internal Revenue missed its target across the board – value-added tax (VAT) short by P38.187 billion; income tax by P9.715 billion; percentage tax by P4.098 billion; and excise tax by P3.915 billion.

Guess which performed the least in revenue collection? The Large Taxpayers Group headed by no less than the chief tax collector herself. This group handles the top 1,000 corporations.

Are we surprised? Hohum! Even the Central Bank has dodged the BIR.

To rub salt on our wounds, here comes the big tax cheats proposing new tax measures, which presumably would not be paid either.

Local governments would suffer the brunt of this national government ineptitude. They get 40 percent of the Internal Revenue Allotment. The national government plugs the loophole by selling its assets. Unfortunately, local governments have little to offer.

And if there are any, I would not agree to this unsustainable way of raising revenues.

(5:28 a.m.)