Gross tax scheme won’t happen soon

It seems that we rejoiced too soon. Our previous column in praise of the Arroyo government's gross tax scheme may have raised false hopes. Based on what the President told us in that dinner Tuesday last week, the bill to amend the tax code still has a long way to go. The DOF tax experts still have to submit a draft of the bill. Some congressmen are preparing their own drafts too. And I got the impression from the President's remarks that they don't really mind Congress coming up with its own version altogether.

I asked if it is possible to file an urgent measure that will at least allow those earning P75,000 or minimum wage workers to be exempted from paying and filing income tax returns. The President said tax reform must come as a package because everything is inter-related.

I guess this means we will still be covered by the existing tax code for this tax year. Whatever benefits are envisioned by GMA to come from her tax reform proposal won't be felt until 2003 at the earliest, most likely 2004. That will be too late for the economic boost they say the tax cut will bring to our economy that is needed now. The poor must still pay income taxes, as usual.

Actually, there are really so many points the administration must clarify about GMA's tax plan. I remember having a spirited discussion with then Sen. Juan Ponce Enrile at the 365 Club precisely about what was then a proposal to scrap the prevailing gross modified tax scheme for professionals. I argued that the gross tax scheme was superior to the one where expenses must be itemized. The superiority of gross taxation lies in the limited discretion of both taxpayer and tax examiner to connive against the government treasury. Sen. Enrile however said we must trust our revenue collectors.

I nearly fell off my seat. Enrile is as savvy as they get and he was telling me to trust revenue examiners to be honest? I found out later that Enrile was merely expressing the advice given by DOF technocrats. They must have figured out at that time that eliminating or minimizing corruption at the BIR is not as important as collecting as much as they can. To her credit, President GMA told us during that dinner last week that cleaning up the BIR is at the top of her list.

But from what I understand from the brief conversation I had with Secretary Lito Camacho, they also think they can collect more from the gross tax scheme. An experienced tax consultant I had dinner with also thinks that as far as individual taxpayers are concerned, the gross tax scheme may deliver more money to the treasury. Computerization will keep taxpayers honest about their gross income. It is all arithmetic from there.

Is it stupid for me to ask if there is institutional memory at DOF? Did Camacho and company read the studies made in the past that concluded the gross tax scheme is not feasible? Or is this a significantly different scheme? Maybe we ought to get more details from the DOF. Also, the administration should have a timetable for seeing this tax reform through. Before they know it, one year is over and GMA must produce results for her 2002 SONA.

Government by blackmail

Lanny Nañagas was not the first reformer to fall because of mob rule and this administration's lack of spine. Remember Admiral Willy Wong? He was the chief of the Philippine Navy who was axed by the administration because some mutinous Marines didn't like his management style. Admiral Wong was also trying to clean up the Marines of anomalous deals.

Of course, they promised to investigate the anomalies when Wong was canned. But no one has heard anything more about any Marine officer being punished following an investigation.

Wong, like Nañagas, earned the ire of subordinates who had plenty of nasty things to hide. And instead of getting support from an administration that came to power because people wanted a new moral order, they were removed from office simply because Malacañang can't stand up to mob rule.

This is so different from the way former President Reagan responded to striking air traffic controllers. Yet, order in America's air space seemed more critical to a nation's daily life than a bunch of insecure social security bureaucrats.

Let's see if the Civil Service Commission has any clout to discipline civil servants at all. Will Karina David ask the SSS strikers to explain why they should be subjected to disciplinary action for walking out on their jobs? This is a test of our institutions. Do you still wonder why confidence in government is so low?

SSS overstaffed

I couldn't believe it. Why should SSS have 59 vice presidents? What do they all do that makes them deserve such a title? It is obvious that Cora dela Paz must ask the Civil Service Commission or some other body to do a management audit of the SSS's table of organization. They are spending too much of our money on officers and staff and yet, they can't eliminate those long line of members through more efficient service.

You don't need a Harvard MBA degree to know that 59 vice presidents for SSS, all earning over P100,000 a month each is way too many. Giving higher than normal pay didn't improve their ability to avoid lousy investment decisions that have brought large losses last year alone. And when 10 percent of the staff kept operations going while 90 percent rallied, that goes to show that bureaucracy is overstaffed.

Privatization may be out of the question but trimming the staff should be very much part of the agenda. Why should the SSS have its own staff of dentists, for instance? Private dental practitioners should be tapped for their dental requirements.

As for the top SSS executives who led the anarchists, maybe the anti-graft probe body should also look into income earned by simply trading on insider information. Under Chuckie Arellano, SSS actually moved the market. Anyone who knew what SSS would buy and for how much, usually in the last few minutes of trade, could make a bundle just riding on the information. Maybe there is also work for Lilia Bautista here.

Politicians

Dr. Ernie Espiritu is back with this one liner, actually, a bumper sticker about politicians, American or Filipino.

If We Quit Voting Will They All Go Away? (Boo Chanco's e-mail address is [email protected])