In a forum, Marites Pundato, vice president for external affairs of the Tiangge Merchants of Metro Manila, claimed Revenue Regulation 16-2003 was "highly arbitrary and oppressive" and threatens the very existence of "stall owners as small scale entrepreneurs.
Pundato, who sells magazines at a shopping center in Greenhills, San Juan, said that at present each tiangge owner pays P30,000 a month for the selling space.
"Under the regulation, small to medium enterprises (SMEs) refer to those businesses with a capital of P3 million and above. Most of the tiangge owners are paying P30,000 for the stalls and the BIR (Bureau of Internal Revenue) also wants us to pay an additional tax. We cannot qualify in the P3-million bracket they set for SMEs because the P30,000 we are paying for our stalls is our capital," Pundato said.
She said the RR 16-2003 seeks to collect the expanded value-added tax (EVAT) in advance, particularly targeting owners of seasonal stalls while exempting the so-called "fixed stalls."
"There is no substantial distinction between fix/permanent and seasonal stalls for tax purposes for the very reason that both owners are registered as taxpayers. RR 16-2003 makes an arbitrary distinction based on the duration of the tiangge," Pundato said.
She said collecting EVAT in advance in the absence of existing taxable transactions "violates our rights to property without due process of law."
"RR 16-2003 requires us to advance taxes on income that has not yet been and may never be earned. Many of us make very little, sometimes nothing at all, from our operations," Pundato said. "Tianggeros are already paying EVAT through their lessors, and paying individual and company incomes taxes to the BIR under the National Internal Revenue Code. RR 16-2003 will tax the same taxpayers twice. It imposes a presumed income tax."
She said capital is sourced mainly from "loans, separation benefits from our former employees, incentives for rebel returnees, or small savings."
"Sometimes our sales for the day are not even enough to pay the minimum wage of our staff. The additional tax will literally kill us by depriving us of much-needed livelihood. About two-thirds of all tianggeros borrow heavily from financiers, sometimes at the rate of as much as 10 percent per month to sustain their operations. This new tax scheme will practically force tiangge operations out of business. We cannot afford to have more unemployed people in this country at this time of economic difficulty," Pundato said.
She said that of the 800 to 1,000 tianggeros in Metro Manila, 70 percent come from Mindanao.
"We decided to leave Mindanao because of the ongoing conflict between the government troops and the rebels. We want peace and we want to work here in Metro Manila to raise our families. This is the only source of income that we have and now it is being threatened by a repressive law of the government," Pundato said. – Jose Rodel Clapano