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Wednesday, December 25, 2024

Department of Pain

If there were a Department of Pain—an agency dedicated to inflicting the greatest amount of discomfort on ordinary working people—it would certainly have no shortage of officials to run it.

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For example, there is a cockalorum in Congress who is pushing for a tax on digital services. To make up for the loss of revenue once the government cuts corporate income taxes to 25 percent and “to soothe the pain inflicted by COVID-19 on businesses,” this lawmaker wants to turn the tax screws on subscriptions to video and music streaming services and ads on social media sites. He also wants to make online sales platforms withholding tax agents for the government. He proposes to call these measures a “Netflix tax,” a “Facebook ad tax,” and a “Lazada tax.”

But it is a little odd to hear this lawmaker complain about the loss of government revenue, since he was a vocal supporter of the Tax Reform and Acceleration and Inclusion or TRAIN Act or TRAIN, which mandates the cut in corporate taxes to spur investments and economic growth. If he did not worry at the time he signed the TRAIN law about the loss of government revenue, why should he do so now?

His second rationale­—“to soothe the pain inflicted by COVID-19 on businesses”—is pure balderdash. How specifically will a tax on streaming services or online merchants benefit say, restaurants that have closed down because of a nearly three-month lockdown? Or barbershops and salons that have only been able to reopen now? Or musicians who have been unable to perform live because of quarantine restrictions?

In the last three months, we have seen so many impositions attributed to the COVID-19 pandemic. Some of them are justified; this one is clearly not. Rather, it is a bald-faced excuse to gain easy money for the government, without offering anything in return to those being taxed.

In the end, this lawmaker’s taxes will be paid, not by the corporations that provide digital services, but by us, their customers. How does that soothe the pain?

Also in the running for the Department of Pain are Finance officials who are chafing at the bit to cash in on the “bonanza” that online sellers are said to be realizing as a result of the COVID-19 lockdown. Never mind that most of these sellers are small-time entrepreneurs trying to get by selling homemade baked goods, clothes or trinkets on social media. These Finance officials insist that anyone selling things online register and pay a tax—imposing an unwarranted burden on fledgling ventures that might not even last.

Senate Majority Leader Miguel Zubiri on Sunday proposed to "heavily" impose taxes on Philippine Offshore Gaming Operators (POGO) instead of small-time online sellers.

Senate Majority Leader Juan Miguel Zubiri is right on the nose when he says the move by the Bureau of Internal Revenue is “not only insensitive but totally unnecessary.”

"First of all, many of these online sellers are trying to survive during this time of a pandemic and to harass them on their last means of income is heartless to say the least," he said.

He suggests, not without cause, that the taxman go after the online gambling hubs that this government has wooed and protected—and which owed at least P27 billion in unpaid tax liabilities in 2019. You’d have to harass a whole lot of Facebook sellers to scare up that amount of cash.

Finally, we could also see a lateral move to a Department of Pain for a Cabinet secretary whose expertise it is to blame his subordinates for his failure to swiftly and effectively deal with the COVID-19 pandemic.

President Duterte likes to say he wants a comfortable life for all Filipinos. We agree, but at this point, forget comfort—please get that knee off our necks.

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