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Additional taxes will further burden us

(It has been some time since Gabriela Women’s Party (GWP) in the Cordillera last came out with a public statement. After winning a seat in Congress during the May 2004 elections, the progressive women’s political party in the Cordillera took a low profile, quietly going about its organizing and educating efforts among its members in the region, at the same time supporting the work of our representative, Congresswoman Liza Maza, in Congress. This week, Women’s Front gives way to the Gabriela Women’s Party’s analysis and position on the proposed tax measures of President Gloria Macapagal-Arroyo.)

It is urgent that we express our strong opposition to any additional taxes that will further burden us at this time of worsening economic crisis. Everyday, many of us experience grinding hunger, shocking price increases of fuel, LPG and basic goods, galloping rates of electricity, water and other basic services. To be subjected to greater hardship by having to pay even more taxes now is an outrage that we should all reject.

After splurging an estimated P7 billion of government funds for her campaign, PGMA is now pushing several new taxes and cost-saving measures to solve the government’s budget deficit. PGMA has proposed 10 revenue generating measures to buttress her bankrupt government. These include: 2-step increase in Value Added Tax, Franchise Tax on telecommunications, Gross Income Taxation, Decreased Fiscal Incentives, Index Reclassification Tax, General Tax Amnesty, increased tariff for petroleum products, increased excise tax for petroleum products, increased charges of government agencies, and broader taxation of government owned and controlled corporations.

In addition, Malacanang plans to increase electricity rates of NAPOCOR and remove subsidies for poor consumers, decrease Internal Revenue Allotments of local government units, increase charges of public transport and toll fees, retrench government employees through the “lateral attrition system” and privatize government properties.

What does this long list of measures mean for the majority of Filipinos, 75% of whom are impoverished and struggling to survive?

Any new tax imposition will be passed on to the consumers through increased prices of commodities. Thus, additional taxes will cause the real wages of the working people to shrink. As it is, the minimum wage (including ECOLA) of P300 in NCR now is only equivalent to P164 in 1994. In the Cordillera Region, the real value of the minimum wage of P179 – P205 now is only P98.45 – P112.75 compared to 1994. This means that a housewife in Baguio whose husband earns the minimum wage can only buy around half of the things she used to buy in 1994.

Increased tariff and taxes on petroleum products will cause fuel prices to increase. As it is, LPG prices already increased 12 times from January to October 2004, from an average of P276 per tank in 2003, we now have to pay P360 – P380 per tank! This is a big blow especially on mothers who need to use LPG daily to cook their food or to earn a living.

Increased electricity rates of NAPOCOR are passed on to the end consumers through the “universal charge.” The Energy Regulatory Commission (ERC) recently approved a 98 centavo increase per kilowatt hour of electricity. This means an increase of P246 for those in Luzon who consume 200 kwh per month. Consumers in Baguio and Benguet felt this sharp increase during the last few months. Those who used to pay more or less P350 monthly were shocked to receive electric bills showing P600 to P700!

Increased charges of national agencies will mean higher fees for court and legal services, licenses, and other government requirements, which the people need to comply with from day to day.

We can cite many more ill-effects that these cost-cutting and revenue-generating measures of the government have on the people. But the few mentioned above already show that they merely serve to worsen the regressive nature of taxation in the country by passing on the final burden of increased taxes to the poor.

The solution to the financial and economic crisis in the country is not to make the lives of the poor more miserable by imposing additional taxes on them. Instead, the government should address the real reasons why the budget deficit is so big.

One, it should stop automatic appropriation for debt servicing in the national budget. As of now, 80% of government revenues or 62.7% of total expenditures goes to debt servicing, making it the biggest expense in the 2004 national budget with P542.2 billion. Allotment for basic social services paled in comparison: education made up only 15.5% of the budget, health was given only 1.5%, while housing was given a measly 0.3%. This explains why our children lack the necessary schools, classrooms, books or teachers; why we have to pay so high for medical services even in public hospitals and why there are no longer any free medicines given in public health centers; or why there are millions of homeless squatters all over the country.

Two, it should crack down on big time grafters and corrupt officials in government. Crumbs are all that are left for social welfare and services. Yet even these crumbs are taken up by unscrupulous government officials in high places. According to World Bank figures, 20% of the annual national budget is wasted on corruption. From 1995 to 2000, an estimated P609 billion went to graft and corruption or an estimated P278 million was pocketed by corrupt officials in government each day. This is more money than the ordinary Filipino can ever imagine!

Three, it should go after big time corporate tax-evaders instead of squeezing the life-blood out of ordinary citizens. According to the National Tax Research Center, an estimated P54.1 billion in taxes remain uncollected from corporations each year. An additional P32.6 to P170.8 billion in potential revenues are uncollected because of tax incentives given by government to big capitalist investors.

New taxes imposed on the people are not the answer to the economic crisis. Debt repudiation, a stop to graft and corruption, wage increase, price control, free and better social services – these are just some of what the people desperately need to ease their daily economic hardships. #

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