Tax shortcut

Oh dear. Doctors and lawyers have been paying less taxes than public school teachers.  To most people's minds, the immediate conclusion is that these self-employed professionals been cheating on their taxes. At least, that's the conclusion forwarded by our tax authorities, who cannot wrap their minds around one doctor paying eighty pesos in tax, or less than a caramel frap at Starbucks, or a lawyer paying P300 from his annual income, which is much less than a pint of delicious Haagen Dazs ice cream.

Compare that to our public school teachers, who sit through decades of annoying smart alecky students, and for all their tireless efforts, are taxed at roughly P35,000 per annum.  How could this happen?

The knee jerk response of the head of the medical professionals is to proffer this cute defense: some doctors aren't good at math.  Maybe they added all the income from kidney transplants and then deducted all the profits from bone surgeries.  Or they hit the divisor when they were trying to multiply. Or something like that.  So basically the defense is mathematical error.

The other explanation we are given is that maybe the doctors didn't know how to fill up the tax forms. Errr, piece of advice, sir.  That defense will get you eaten up and swallowed whole in court.  With at least two educational degrees, a judge will find it hard to believe that doctors wouldn't have enough savvy to understand what they were signing.

One popular celebrity recently indicted tried the “it's my accountant's fault” route.  Which might work, depending on how lousy the accountant really is.  I mean, what if your accounts were prepared by someone with fake credentials or who was unlicensed?

The lawyers have been silent, but discretion will probably serve them well at the moment, while they dig through their records and marshal their arguments.  The taxman is coming, so better hunker down and prepare!

Is it really possible for lawyers to pay a pittance in taxes? Well, to my simplistic non-tax expert and non-accountant mind, maybe.  What if the doctor really spent gazillions in beautifying his clinic and buying new equipment, which outstripped his income from walk-in clients?  What if the lawyer had a nice office, with paralegals and receptionists to pay, but was too lazy to actually look for clients and so what he was making was just barely enough to cover overhead?  Wouldn't that explain the low tax?

It's probably not a good idea to indicate the profession of “lawyer” or “doctor” in tax returns just right now, not when the Bureau of Internal Revenue is so hot for tax blood.  But really, why doesn't the BIR run after politicians whose assets grew exponentially over their years in power?

And not just the politicians.  What about their hangers-on? I just saw the sickening video of the birthday party of the daughter of alleged pork-scammer Napoles, set in a posh L.A. hotel, complete with runway models and decadent food.  Almost all the posts on Facebook or the blogs right away concluded it was Philippine tax money that had financed her luxurious lifestyle, including her thousand dollar dresses and designer bags.

So my question is, what's the incentive for doctors and lawyers to remit the proper taxes when they can see that the politicians are just either misusing the funds to build stupid flyovers or even more stupid basketball courts, or worse, pocketing the funds themselves and buying million peso dinners in New York? (Or houses in Atherton or condos in Manhattan?)

If those funds aren't going to be used to better the lives of citizens or improve their general surroundings, with better roads and excellent infrastructure, where's the fun in forking over taxes?  (Ok, 'fun' might stretch it, but you get the drift).

Maybe this is another argument a crafty defense lawyer could use.  Rather than wait for the government to maybe, perhaps, eventually apply the taxes to benefit the taxpayer, the taxpayer just went ahead and spent it on himself.  That way the middleman politician and the inefficient public servants didn't have a chance to get their cut.  If I were a lawmaker, I would legalize this defense.  At least, while corruption still pervades our government.