So that’s why taxing income is kinda “bass-ackwards” and taxing sales/consumption is another way to think about it.

Sales/consumption is the lubricant of the economy and a sales tax kinda encourages saving, so less velocity of money. But then again, even the current system (VAT taxes essentially are taxes on the sales of most items) hasn’t really curbed spending. And without an income tax, people would have more money to spend.

Seems to be “spenders gonna spend, savers gonna save.” regardless of how the tax system is structured.

I thought it was a very simple and brilliant scheme. Way better than graduated tax brackets depending on income. And besides, the super rich with lots of money to throw around don’t get a majority of their money from high incomes; they get it from stock sales/dividends so a graduated income tax bracket is only really felt by a small minority of the upper middle class (some high management, individuals in the entertainment industry, etc.)

The poor getting taxed at the same rate would probably still come out better for it since you don’t usually accurately declare the sale of all your pandesals. Nor does the typical sari-sari store operate with a business permit and declare figures for taxes at present.

The problem with adding complexity to the tax code means you introduce more holes which those with more money can exploit to their advantage.

Now if all bank records were transparent, you could see where the money is coming and going and transparency/clarity is the enemy of those who want to circumvent the system. Obfuscation and secrecy are the tools of the corrupt that’s why they can get away with things. But then, everyone has skeletons in their closet so total transparency is a paradigm shift that would be a very hard sell to anyone.

Also agree with comment 85, that we should have a flat tax system, where the basis for taxes would be sales. So the BIR just checks and keeps track of a company’s sales. Simple and less prone to “negotiations.”

Thanks for sharing MM.

Mark, I think folks still view the whole thing in relative terms. Compared to some of the other candidates for President at the time, I am still confident Noy has done a reasonable job. I don’t think it is ideal, but I am very much a pragmatist now, and would rather have him than some of the others who were in the running. Perhaps Gibo would have been another good choice, but who knows what a Teodoro presidency would have turned out like… I still believe Mar would have been a better choice than Binay, but ultimately, I am but one voter, and I made my choices and have to live with it. Lots of folks echoed similar sentiments as yours with respect to Gloria and we had her for 10 years…

Exactly! It’s so sad that the yellow army still fails to see how incompetent Noynoy is despite this. And, the irony of this post is the author still believes in Noynoy. It’s like saying someone is beautiful but has an ugly face. The worst part is, everyone suffers. Even those who at the very start saw how big of a disaster a Noynoy presidency would be.

On your clarification of MCIT, I have reverted to actual financial statements, and corrected the post above. While it seems the MCIT percentage was given as an explanation to me, the actual financial statements show a much larger gross income than you suggest (closer to 35%), a lot of legitimate operating expenses and deductions, a very minimal net income and 32% tax on that income.

You are right in that margins were tight in the first year, but not as tight as you suggest. Meat/pork has some of the smallest margins of any major restaurant protein (beef perhaps being worse), that’s why you see so many chicken places. Our retail price for lechon was on average, PHP450-490 when we opened and during our first year, and gross margins were just 20-25% of that. Whole lechons have even more modest margins, as I am sure any BIR rep can calculate. Of course we sold other food items that improved the overall margins. If you were in Manila, and sold lechon at say PHP750-800 a kilo, you would be closer to your example of 50% you suggest. It was expenses, including staffing, rent, etc. that brought net incomes down in our first year of operation. In our second year, things change noticeably and I am hope they will improve in our third year… If the BIR has to take ads out, wouldn’t it be helpful to list Purveyor, Total Sales, VAT paid, Other taxes paid and Income taxes paid? Wouldn’t that present a better/clearer picture, and a natural comparison amongst companies in a similar industry — rather than a shotgun approach?