VAT ba ako kasali dito?

Ayun na nga. I had just been told that I should register myself as a "VATable" entity, whatever that means. That’s because half of my income is in the form of consultant’s fees and honoraria (as what PhilStar pays me for this column) and these are subject to VAT. This means one of two things: either my clients keep me whole by increasing my fees by 10 percent to cover VAT or my income is reduced by 10 percent representing the amount my clients will withhold to comply with the VAT law. I’m not a business naman. VAT ba ako kasali dito?

VAT is not the same as the withholding tax or the expanded withholding tax the showbiz folks protested against last year. The withholding tax has to do with income tax. VAT is a totally new tax. It is in theory an indirect tax that could be passed on. But I was told to perish any thoughts of my being able to freely pass on the burden to anyone.

Effectively therefore, on top of the 30 percent plus income tax I pay each year, I must add another 10 percent VAT on the 50 percent of my income that is VAT covered. I am beginning to get the message that in this country, trying to improve your income by moonlighting is now a crime punishable by VAT.

Since the other half of my income is in the form of salaries covered by withholding tax, I have the worst of all worlds. I can’t even join an anti VAT rally because half of me feels the injustice of salaried people paying more than professionals, showbiz folks and other VATable individuals.

The figures from the Department of Finance tell it all. Wage earners in 2002, paid P61.66 billion in taxes while professionals and business executives remitted only P15.41 billion. Even with this new drive, I doubt that doctors, lawyers and accountants would pay any more taxes than they want to, VAT or income tax. Consumers are not likely to ask for receipts from the guys who look after their well being. You could also end up paying 10 percent more. The case of my VATable income, on the other hand, is practically a payroll tax too, as direct a tax as it could be and there is no choice but to declare.

I realize that taxes are inevitable, except for oil rich countries, because citizens must pay for government to function. But then, government as we know it hardly functions. More important, who says government is better able to spend the money I pay in taxes for social good? I can take that function myself. That is in fact the reason why Foundations are mushrooming in this country. All those Foundations exist because the organizers think they can spend their money better and thus have permission to deny government that money in the form of tax exemptions. They should plug obvious loopholes like this before imposing new taxes like VAT on guys like me.

But I digress. Going back to VAT, I have been sufficiently bamboozled into submission by the realization that there is nothing more I could do except to comply. It is my fate to give up more money in the form of more taxes I have to pay so that Lito Camacho can give his sister and her cronies more tax freebies in instruments presumptuously named Peace Bonds.

You would think that because they are creaming you unjustly, they would make it easy for you to comply. You have to fill up and file a bureaucratic form to register as a VAT entity, print appropriate receipts that must be approved by the BIR and maintain proper books. Also, instead of going to the BIR once a year, I have to go practically every month. Super abala!

I have chosen through the years, the straightforward route of the standard 10-percent deduction. I just don’t want to see the shadow of a revenue examiner who will most likely imagine something wrong that needs a compromise, if you know what I mean. Now I may have to retain an accountant to keep track of input and output VAT and all those receipts.

I don’t know if the BIR is open to suggestions but here are some anyway. Don’t just explain how that VAT works or why government needs to collect this tax from all concerned. Make it easy to comply. Have simple forms. And short of a welcome hug at the BIR office when we have to transact more often now, make it a pleasant experience each time.

Paying taxes, specially when you know it isn’t being used well, is never fun. We are justified to kick and scream doing it. It would help if government makes the process as painless as possible. I am dreaming of course. But I am wrong. Dreaming isn’t the word. Delirious, maybe!

Post Office thieves

Actually, anyone who trusts the Post Office for really important things can only deserve his fate. Yet, if the Post Office is that useless and unworthy of our trust, why not scuttle it completely.

Some months ago, I carried the complaint of one of our readers, Arthur Tanty regarding problems he encountered with lost checks sent through the mail and encashed through our banking system. I asked the Bangko Sentral to look into the matter, but the BSP came back with a response that was neither here nor there. In other words, if you lose checks found to have been encashed by local banks, you are on your own. Tio Paeng, tell me it isn’t true!

Anyway, Mr. Tanty who sells stuff through the Internet, writes again about his continuing saga with lost checks, postal crooks and bankers in cahoots with crooks. This situation cannot remain as hopeless as it is. Here are portions of Mr. Tanty’s letter.

I was also waiting for three other MOs ($273 total) and when they failed to arrive, I contacted the issuing company Bidpay to ask for copies. The MOs were deposited on two different dates in June and July at Bank of Philippine Islands (BPI)-Carmen Rosales Branch (Pangasinan). I filed my complaint at their head office in Makati. I was told that I have to get my money from Bidpay and not them.

Giving the postal people the benefit of the doubt, I filed a complaint at the Central Post Office regarding the seven tampered letters last Aug. 21 and surrendered the envelopes as evidence. I received their response on Jan. 13, nearly five months later. Regional Director Engineer Mama Lalanto Ceso III said that my complaint had been "closed and dropped...for lack of evidence to pinpoint the culprit."

He added that it is prohibited to insert currency in letters. The letter carrier was supposed to have been investigated and he said that he received the letters from the Airmail Dispatching Window in good condition and he delivered these in good condition. Mr. Ceso must have misunderstood my complaint: the four letters he mentioned were tampered with but the contents (not cash) were still there. He did not mention the three whose contents were gone, all MOs.

We can never be sure if postal people are the thieves but it does not really matter because these would never be stolen if banks refuse to accept them. MOs can be tracked but it also costs a lot of money. I have stopped selling online seven months ago. Why should I strive to earn only to have dishonest folk benefit from my hard work?

I guess the big commercial banks should also help stop this syndicate of mail thieves by refusing to accept their deposits of multiple endorsed checks or money orders. How can the criminals encash with BPI the money orders and checks payable to Mr. Tanty unless the bank officials concerned are in cahoots with the criminal syndicates? The Ayalas should look into this if only because I am sure they don’t want to be unwitting partners of criminal syndicates.

Quit gradually

Now, it’s Dr. Ernie’s turn.

Bill was less than grateful when his urologist recommended he give up sex completely, if he was to beat a rare-but-lethal chronic fatigue disease.

"Give up sex completely, doc?" he shouted. "I’m a young buck. How can you expect me to just go cold turkey?"

"So get married and taper off gradually," the doctor prescribed.

(Boo Chanco’s e-mail address is [email protected])