“Tax” is a word feared by many. Paying taxes is “almost like going to the dentist,” says a New York Times article, with most people delay filing them only to find out they’ll deal with bigger consequences in the long run.
“People fear it because they don’t understand it,” says Atty. Ma. Louella “Peaches” Aranas, a successful tax lawyer and managing partner at LMA Law, a boutique firm in Makati specializing in taxation and corporate law.
“Maybe tax is so foreign to them that it’s difficult to understand. And if you don’t understand something, takot ka.”
With over 20 years of experience in the private tax and corporate practice, Atty. Aranas has been advising her clients to pay their taxes correctly and has observed that most problems stem from people being afraid of tax.
But how do we take out this fear? Atty. Aranas, who was former Director for the Tax Division at SGV & Co. for almost 10 years, believes that it can be achieved by starting to educate the young minds in a less intimidating and more relatable way.
“Introduce the concept of taxes at an earlier age and help them to think about taxes by asking the right questions: What is taxation?, Where does the money go?, What is it used for?, Why do you need to pay taxes?” These basic and important questions about our tax obligation can help people start thinking and acting accordingly.
Another reason could be the fear of corruption. “People will always have this negative view of taxation and government,” says Aranas. Living in a country with notorious corruption scandals amplifies the fear, but that doesn’t mean it ceases to be your civic obligation. People refuse to pay their taxes as some sort of protest to the government, which she stresses, is a wrong mentality. “What makes you not corrupt [if] you're also not paying your taxes? You're just like the rest of them,” she added.
Paying taxes is also a form of nationalism, a civic duty of each Filipino citizen—and it’s important for people to know it. “If you impart that value to them while they're at that age, they'll carry that with them as they grow to their adulthood,” Aranas points out.
Poverty and greed could also be reasons, but Atty. Aranas believes that by reorienting ourselves, it can be a helpful step towards change.
A graduate of Ateneo de Manila University, Atty. Aranas wants to make learning about tax more modernized and interesting for the fresh minds. She is set to do Q&A consultations and release video instructional materials in the coming months. She hopes it will be incorporated in the curriculum of schools, or at least to be discussed in the classrooms in the next few years. “I think the young people now are actually idealistic whether we accept it or not,” says Aranas, who puts her faith in the new generation.
“I'm hoping it will morph into something sophisticated and still informative.” She also suggests creating a program or app for computing taxes, which makes learning more fun and interesting.
“It’s time to give back,” says Aranas, when asked why she wants to push this advocacy. After serving clients for more than two decades, giving back, according to her, defines her daily activities and gives her purpose. “It's not anymore about me, my career, my finances, my possessions, my reputation—it’s not anymore that. It's about leaving a good legacy, how I can give back in a small way.”