Managing its taxes

Many analysts that have started to crunch Smart’s financial numbers have one general conclusion – the financial performance of the country’s leading mobile operator for 2006 will depend on how well it manages its taxes.

In the last five years, Smart’s record-breaking financial performance was aided by the tax holiday it got from the Board of Investments. Can you imagine a company earning billions of pesos and having to pay very little tax? How lucky can it get?

Aside from the tax holiday, Smart’s recently resigned chief finance officer Peter Lawrence who is a financial tax expert was able to maximize the company’s tax credits, carry over Piltel’s losses to Smart, and devise other ingenious schemes that saved billions for the company and made its bottom line sparkle.

In the recent financial results announcement of PLDT, it was evident that taxes have started to weigh heavily on Smart’s financial performance. Analysts expect that unless Smart’s financial team engineers its taxes well this year, the numbers aren’t going to look good for the high-flying company.

A multinational investment banker explains that they have accepted that all cellular companies will show flat revenue growth, although they feel that if Smart manages its tax well, its yearend net income performance will show a healthy increase. If it doesn’t, its bottom line will be affected.

Why am I writing about taxes? Because it’s almost April - the time we all have to pay our taxes. I wonder how I can get a tax holiday just like Smart? By the way, pay your taxes early and on time.

Not cry babies

It is a foregone conclusion that government cannot provide all the solutions to our problems.

Some of us prefer to complain and complain. Others take the matter into their own hands.

The Philippine sugar industry is one of the very few industries in the country that have taken a pro-active stance to uplift its condition. Doomed to oblivion during the Marcos years, it simply refused to die. Inspite of the comprehensive agrarian reform program, high cost of inputs, an unfair world trade regime, and a host of other obstacles, the sugar industry has shown to all and sundry that it is not a cry baby and that it can solve its problems, mostly on its own.

Just recently, the sugar sector has once again taught all of us how an ideal government-private sector partnership should be.

This partnership was first seen when the industry decided to establish a privately funded sugar research institute which has so far produced a number of high-yielding sugarcane varieties and has assisted farmers in adopting improved cultural field practices. Government cannot do the job alone, so the sugar industry decided to do its part. In 2003-2004, the Philippines became a net exporter of sugar, proof that a strong government-private sector partnership can move things forward.

Instead of complaining against the stringent requirements of the Clean Air Act and the Clean Water Act, local sugar mills have taken upon themselves to adopt a policy of self-regulation in partnership with the Sugar Regulatory Administration (SRA) in as far as environmental management issues are concerned. The sugar industry even financed the acquisition of pollution source sampling and analysis equipment as well as laboratory apparatus for air and wastewater samples which it donated to the SRA. The SRA in turn will use these equipment to help the sugar mills monitor compliance with environmental standards.

So far, the sugar milling industry has spent over P5 billion to put up facilities in order to comply with environmental regulations. And it is prepared to spend another P5 billion over the next three years to fully comply with its commitments as far as air emission and water effluent levels are concerned. Central Azucarera Don Pedro (CADP) president Ramon Picornell says that in meeting the requirements of the law, sugar mills have stopped looking at the return on investments or ROI of these new equipment and instead have treated them like a "donation" to mother Earth.

Not again

The Philippine Alliance Against Pornography has just discovered that Yehey.Com, a local portal, continues to provide pornographic materials in its website. In its tabloids section,Yehey.Com has an archive of sex stories which became inactive for sometime after an expose made in this column. Unfortunately, it has been activated recently with more disturbing sex stories. Once of its more recent stories was entitled "Si Marlene at Sophia" which contained not only graphic sexual content but also dwelled on child pornography.

It is indeed deplorable that one of the most popular web portals and a reputable institution such as WS Fiesta Online (Yehey.Com) would continue to operate the "Lihim na Liham" section after a public pronouncement that it does not and will not support and promote pornography.

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