No New Taxes?

Opinions Unlimited

by Atty. Tony(APA) Acyatan (Atty. APA – chairman of Acyatan & Co., CPAs-DFK International is president of PICPA in 1990 and ASEAN Federation of CPAs (1998-2000) and Accountancy Hall-of-Famer (2006).

TAXATION: President Noynoy Aquino by way of both pre-election and post election promises declared that under his Administration, there will be no new tax impositions – only efficient and effective tax collection system. This spells a very tall order for the next BIR Commissioner what with the records of revenue shortfalls in the last six or so years. As the PGMA regime bows out, there is a record budget deficit exacerbated by the huge expenditures in the last six months.

There is that likelihood that new tax measures will have to be legislated – or, at the least, there will be realignments or reclassification of the kinds of taxes now being collected. Those in the know favor the raising of the pass-on taxes (led by the value-added tax) instead of increasing the corporate income tax rates. From where we sit – the increased tax rates will be imposed on the so-called “sin taxes” (alcohol and cigarettes).

CLEVER: We doff our hat to outgoing president Gloria Macapagal Arroyo for her smart and wily political moves. I remember listening to her ‘I”m sorry” TV show. She was apologizing for a presumptively illegal or at least immoral act, but without admitting what that was. Her TV appearance, sad and remorseful, is unforgettable. Yet up to now, she goes scot-free for whatever sorrowful “sin” she may have committed then.

As congresswoman – PGMA (and her band of close friends and relatives) is somebody to reckon with in government. Many of her Lakas-Kampi allies may have bolted the party to go to the new majority – but their “utang na loob” of the past may not just be forgotten. We are sure that somehow, there were documentary evidences of the millions she distributed to her former allies.

SPENDING: Our government accounting is budget-based. The expenditures (cash outflows) are pre-determined, including the resultant funding shortfall. When costs and expenses exceed the appropriations, the budget deficit is increased further. This is what’s happening now. By way of “last hurrah” – erstwhile sidelined projects were revived and spending done this quarter.

Look around you (as PGMA advises) and see the multitude of infrastructures. Construction and repairs of roads and bridges continue unabated – unmindful of the setting administration sun. Worse, the express repairs create highway traffic havoc, made further worse by uncivil drivers who occupy multi-lanes– to the discomfort of fellow motorists. Ganito ba ang Pinoy?

YUAN RISES: On the prodding of the United States, the Chinese government has divorced the domestic currency (yuan) from the US Dollar as regards exchange valuation. This affects the pricing of Chinese goods being exported to the USA. The Philippine government must also study this FX development as to how it impacts on our trading (export and import) to and from mainland China.

Considering RP-China trade volumes, the yuan revaluation will also affect the exchange value of the Philippine peso. Expert say – in the end, this will favor our domestic currency and the Philippine economy in general since our goods for export will become competitive as against the overly cheap Chinese products now flooding the stores in various parts of the world. Be that as it may – RP products should not only be price-competitive, but more so, quality-assured.

QUOTATION: A pessimist sees the difficulty in an opportunity; An optimist sees the opportunity in every difficulty.

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