The biggest taxpayer in the Philippines is not a mega tycoon or a super taipan. He is boxer Manny Pacquiao. He paid P163.84 million in income taxes in 2013, per the Bureau of Internal Revenue’s Top 500 Individual Taxpayers List for the year. Since the highest tax bracket is 32 percent, a P163.84-million tax implies that Pacman earned P512 million in 2013.
Common sense dictates that the richer you are, the more taxes you pay. Wealth comes from income. Both wealth and income are subject to tax.
However, the Philippines’ richest people are not exactly the biggest taxpayers. The BIR is running after Manny Pacquiao and not after the multi-billionaires. BIR wants to collect P3.3 billion from the eight-division boxing champion, the biggest tax case filed by the state against any individual.
Maybe, the BIR drew inspiration from the Sports Illustrated’s world’s best paid athletes for 2013. Floyd Mayweather tops, with $90 million in earnings. Pacquiao is not in the Top Ten. Floyd and Pacman square off in the fight of the century on May 2, with 40 percent of the purse – the richest in boxing history — going to the Filipino.
The BIR 2013 largest individual taxpayers list is remarkable for the lies it conveys and for the verities it fails to uncover.
For instance, there are more entertainers and media men in the 2013 BIR 500 biggest taxpayers list than there are tycoons and taipans known for their fabulous, if not stupendous wealth.
The entertainers and mediamen paid far more taxes than the billionaires did.
The top taxpayers in 2013 are: 1. Pacquiao P163.84 million, 2. Juanito Alcantara P99.6 million, 3. lawyer Estelito Mendoza P73.18 million, 4. Reynaldo Chico P67.34 million, 5. property and gambling taipan Andrew Tan P67.18 million, 6. RCBC President Lorenzo Tan P60.89 million, 7. auto tycoon-politician Pepito Alvarez P55.62 million, 8. drug retail queen Vivian Que Azcona P51.61 million, 9. Meralco President Oscar Reyes P51.44 million, 10. Insular Life CEO Vicente Ayllon P50.08 million;
11. Ronaldo Romero Soliman P46.63 million; 12. SMC Vice Chair and President Ramon S. Ang P46.47 million; 13. banker Lauro Baja P45.19 million; 14. actor Piolo Pascual P42.53 million; 15. actor John Lloyd Cruz P41.97 million; 16. tv host Kris Aquino P40.48 million; 17. First Holdings CEO Federico R. Lopez P39.89 million; 18. Victor Angeles P39.76 million; 19. Sharon Cuneta P39 million; and 20. Willie Revillame P38.3 million.
Of the 20, only Andrew Tan is a veritable dollar billionaire. He was the Philippines’ fourth richest in 2014 by Forbes with wealth of $5.1 billion.
Pepito Alvarez is a peso billionaire as is SMC’s RSA but they are not in the Forbes’ 2014 25 richest. RSA is No. 32 richest with estimated wealth of $380 million, per Forbes. No. 8 biggest taxpayer Vivian Azcona is No. 18 in wealth, per Forbes, with $935 million.
Five of the 20 biggest taxpayers are celebrity entertainers – Pacquiao, Piolo Pascual, John Lloyd, Sharon, and Willie. One dollar billionaire (Tan) vs. five entertainers – the math simply is amazing.
It is not that the billionaires do not pay taxes. They are just tax-savvy. They employ an army of accountants and lawyers to exploit loopholes in the tax laws, which are many. Also, their holding companies holding their wealth are listed companies. When you buy and sell listed stocks, there is only a tax of .25 percent. (one fourth of one percent).
The tycoons draw income as stock which are not subject to capital gains tax (if the company is listed), or as cash dividends which are subject to final withholding tax of 20 percent. Having been taxed, the dividend income is not declared in the income tax return.
This may change with the tax year 2015. The BIR requires all income to be declared by individual tax filers, even if such income had been subject to a final withholding tax or was not taxed under the law. The additional reporting requirement has been postponed at least four times, thanks to pressure from the country’s business elite.
In 2014, Forbes listed the richest Filipinos. They are in order of wealth: 1. Henry Sy Sr., $12.7 billion; 2. Lucio Tan $6.1 billion; 3. Enrique Razon Jr. $5.2 billion; 4. Andrew Tan $5.1 billion; 5. John Gokongwei Jr. $4.9 billion; 6. David Consunji $3.9 billion; 7. George Ty $3.7 billion; 8. Aboitiz family $3.6 billion; 9. Jaime Zobel de Ayala $3.4 billion; 10. Tony Tan Caktiong $2 billion;
11. Robert Coyiuto Jr. $1.8 billion; 12. Lucio Co and Susan Co $1.7 billion; 13. Emilio Yap $1.5 billion; 14. Manuel Villar $1.5 billion; 15. Iñigo and Mercedes Zobel $1.2 billion; 16. Alfredo Yao $1 billion; 17. Andrew Gotianun $955 million; 18. Vivian Que Azcona $935 million; 19. Eduardo Cojuangco Jr. $870 million; 20. Beatrice Campos $825 million;
21. Ricardo Po family $770 million; 22. Oscar Lopez $700 million; 23. Alfonso Yuchengco $685 million; 24. Roberto Ongpin $680 million; 25. Betty Ang $670 million; 26. Dean Lao $625 million; 27. Manuel Zamora $620 million; 28. Carlos Chan $550 million; 29. Jorge Araneta $510 million; 30. Mariano Tan Jr. $445 million;
31. Edgar Sia $390 million; 32. Ramon Ang $380 million; 33. Michael Romero $375 million; 34. Concepcion family $320 million; 35. Philip Ang $315 million; 36. Frederick Dy $310 million; 37. Luis Virata $300 million; 38. Alfredo Ramos $260 million; 39. Wilfred Steven Uytengsu Jr. $235 million;
40. Tomas Alcantara $250 million; 41. Jose Antonio $240 million; 42. Bienvenido Tantoco Sr. $235 million; 43. Jacinto Ng $230 million; 44. Gilberto Duavit $200 million; 45. Menardo Jimenez $195 million; 46. Eric Recto $190 million; 47. Walter Brown $183 million; 48. Felipe Gozon $182 million; 49. P. J. Lhuillier $180 million; and Juliette Romualdez $170 million.
Of the first 50 dollar billionaires and richest families listed by Forbes in 2014, only eight made it to the BIR’s top 50 taxpayers ranking –1. Andrew Tan, 5th largest taxpayer; 2. Vivian Que Azcona, 8th; 3. SMC President Ramon S. Ang, 12th; 4. cousins Justo Aboitiz Ortiz and Erramon Aboitiz, 21st and 22nd; 5. brothers Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala, 26th and 32nd; 6. Oscar Lopez, 34th, 7. George Ty, 40th; and 8. container terminal and casino king Enrique Razon Jr., 50th largest taxpayer.
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