Of billboards and receipts
Following my series of articles on buses plying Epifanio de los Santos Avenue (Edsa) and traffic management thereon, readers have asked me to write about their own pet concerns, especially their everyday experiences as commuters. A number expressed concern about the far too excessive number of advertising billboards along Edsa, the South Luzon Expressway, and other thoroughfares elsewhere. Metro Manila Development Authority (MMDA) Chair Francis Tolentino told me that at its peak, there were over 2,000 of such billboards along the 23-kilometer stretch of Edsa alone, an average of 86 billboards per kilometer stretch!
Thankfully, the MMDA under Tolentino is now determined to rid Edsa of these billboards and other road distractions. So if you notice those gigantic billboards diminishing in number and gradually disappearing, now you know why. Tolentino called my attention to the fact that the humongous billboard along the southbound lane of Guadalupe Bridge in Makati has been gone for some time now, thereby making the beautiful steeple of the San Carlos Seminary visible to passersby once again.
One reader suggests that rather than have private companies seek public attention through such billboards, they could be encouraged to adopt an overpass or stretches of highway instead, by painting them and maintaining their cleanliness. Such an “adopt-a-highway” program appears fairly common in the United States and other countries I have visited. These companies may be granted the desired credit or recognition by permitting them a small space to be recognized for their civic-minded contribution to the public good. She argues, “This would build more goodwill and will create a good impression on the public for these companies, much more than when they inflict on us their huge ads that only sow ugliness on our streets.”
Another reader rants about her experience with taxis issuing spurious receipts or no receipts at all, ever since government began requiring taxicabs to issue such receipts more than a year ago. She complains that taxi drivers would tend to have one excuse or another for not issuing a receipt. She recounts how in a recent taxi ride, she was issued a printed receipt from a machine that was clearly not a government-authorized receipt printer. The date printed on her receipt was not even the actual date, but a date in 2009!
Those of us who need these receipts to prove legitimate expenses become unwilling victims when we encounter this malpractice. Meanwhile, government loses substantial tax revenues when taxi operators issue such spurious receipts and get away with it. In the end, we all suffer twice, because lack of government revenues ultimately hits us all with inadequate public services and an unstable economy due to weak government finances.
It is not just taxi receipts that matter, of course, but receipts for all transactions in general. I have time and again stressed the great importance of each of us asking for an official receipt (i.e., one where the tax information number of the establishment is printed) for every significant purchase we make. A major part of the tax evasion that occurs in our economy arises from non-issuance of official receipts or invoices by establishments or individuals making a sale of a good or service. One can almost be sure that where no official receipt has been issued, no taxes due on the sale have been recorded and paid to the government. And we all know that in most cases, business establishments will not voluntarily issue a receipt for a sale unless we ask for it.
The good thing about the value added tax (VAT) and the way it is collected is that it impels businesses to demand receipts whenever they purchase inputs from their suppliers. This is because the VAT they need to pay the Bureau of Internal Revenue (BIR) is determined by calculating 12 percent (the current VAT rate) of the gross sales of the company, and then deducting from it all VAT paid on all inputs used. The latter is evidenced by the receipts obtained for all purchases of such inputs. Thus, for any business seeking to minimize its tax payments, every receipt it obtains for its purchases counts.
For example, raw cotton is turned by a textile manufacturer into fabric that is turned by a garment manufacturer into a shirt, which is then sold to a wholesaler, who in turn sells the shirt to a retailer, from whom the consumer finally buys the shirt. The textile manufacturer, the garment manufacturer, the clothing wholesaler and the retailer all find it in their interest to ask for a receipt as they purchase the product that they each add value to as it progresses through these various links in the value chain. The VAT is often described as a self-policing tax because of this automatic compulsion on the part of businesses to demand a receipt for every purchase they make.
Unfortunately, this self-serving compulsion to ask for a receipt for every purchase does not work all the way to the final consumer, who usually has no need for the receipt (unless someone else is reimbursing her for the purchase). It is here where the weakest link in the collection of the VAT is, and where we are called upon to do our share as good citizens. That lady complaining about her taxi’s spurious receipt was not being frivolous at all. We have no right to criticize the government for poor tax collection if we fail to demand a proper receipt for our own purchases, because by such omission we ourselves become willing accomplices to tax evasion.