Businessmen Ought To Pay More Taxes
The Case for CSR
(Article in the Nation)
30 November 2006
The article argues that a basic case for a viable corporate social responsibility in the Philippines is to make businessmen and wealthy people pay correct taxes.
While official poverty incidence level in the Philippines from 1985-2000 declined from 44.2% of families to 31.8%, the absolute number of poor increased from 26.67 million to 30.85 million. The 2003 World Bank report indicates that there is a 10% drop in the real average family incomes in the Philippines. In contrast, the wealthy people get richer as stocks appreciated by P2.24 million or 50% between September 2004 and May 2006.
In paying taxes, however, poor to middle-income wage earners pay more taxes than do businessmen. In 2005, wage earners paid a total of P94 billion in income taxes (or 92% of total taxes) while big businessmen paid only P8.4 billion (or 8%). BIR Commissioner Jojo Buñag finds this set-up disproportionate in relation to the income of businessmen and professionals. According to World Bank data, the richest 20% of families in the Philippines makes 52.3% of the total income while the poorest 20% makes just 5.4%. In this case, the rich owe the government P45 billion in unpaid taxes while the government ought to refund the wage earners P88.5 billion in tax overpayments.
