Proem

There have been many researches that show that when the population of a country is highly literate, that country tends to be rich.  Most of these researches will not show the Philippines because it is an exception.

Nobody could yet explain why the Philippines with its highly educated population and very proficient in the English language, has yet 26% of its population classified as poor.

What Are We Learning?

In year 2002 we conducted a research in the kind of education imparted in Bohol. We found out that the parents were complaining that when their children finished high school they would no longer help in the farm and in the household chores.  Why? Because the high school graduates did not learn anything useful and applicable to their native community.  At present the same situation is still prevailing.  Their knowledge obtained are patterned upon the United States of America.

Brain Drain

In the 1960s, before the Martial Law year, the most common topic was “Brain Drain”.  It means that our best educated and bright citizens tend to emigrate to foreign countries.  It was relatively easy to do it because the Filipinos know how to speak English and know more about United States history than Philippines history.

Many speeches, commentaries, and newspaper articles were made against “Brain Drain”.  The most common argument was that the foreigners are benefiting from our intelligent people instead of the Philippines.

When Martial Law was declared in Sept. 21, 1972 the out migration of educated Filipinos became a deluge.  From that time until the present there is no more mention of “Brain Drain”.  In fact “Brain Drain” was encouraged and even including the “Brawn (muscle) Drain”.  They are now called Overseas Foreign Workers (OFW).

The New Heroes

There are now about 10 Million Filipino OFWs.  Their money remittances back to the Philippines are what support the economy of the Philippines.  The vaunted 6% present economic growth in the Philippines today is due to these remittances.  There is still no internal economic growth within the Philippines. So the OFWs are hailed as the new heroes.  If it were not for them the Philippines would have been bankrupt long ago.

Open The Balikbayan Boxes?

President Ferdinand Marcos issued a Presidential Decree that the OFWs can send back to the Philippines “Balikbayan Boxes” without tax and inspection provided it is declared that the contents will not be more than P10,000.

It is a usual reaction of Filipino government officials that if something is successful, it will be viewed with suspicion.  A few days ago the Bureau of Customs (BOC) issued an order that the Balikbayan boxes will be opened for inspection for taxation purposes.  The affected families reached vehemently.

The BOC order was viewed as an insensitive imposition of a corrupt agency.  Do you really think that the BOC has the personnel to open 600,000 Balikbayan boxes per month?  If nothing is wrong with the box, who will repack the box?  If it is declared to be taxable, who will pay the tax?  The poor recipient who do not have the money?

I once received a notice from the Post Office that a box was sent to me and will be opened in my presence for tax purposes.  The box was sent from the United States by someone I do not know.  When it was opened it contained high school books that I do not need.  The levied tax was very high that I did not accept the box.  Do you think the Post Office spent money to send back the box to the place of origin?

If the addressee of the Balikbayan Box will not or could not pay the levied tax, what will the BOC do not with the box?  Where will the BOC place the 600,000 boxes per month?

Mixed Theories

The basic theory in taxation is either you will be taxed for your income or you will be taxed when you spend your money.  In the Philippines you are taxed in both instances.

When you receive your salary the income tax is already withheld.  When you spend your money that was already taxed, you will be taxed again with the so called “Value Added Tax (VAT)”.

In Arab countries there is no income tax.  Your tax will be required when you spend your money.

Do you still wonder why many Filipinos are poor?  It is because we are heavily taxed with no visible benefits from the taxes paid.  For example, how is the Road User’s Tax being implemented?

Basically we are still using the tax theories used by the Spaniards when the Philippines was still their colony.  Even the Cedula or Residence Certificate that was hated by the Katinpuneros is still existing. (By Jes B. Tirol)