Quantcast

As I See It

Where are the billionaires and the superrich?

By

Many people found it strange that Kris Aquino, the queen of massacre movies, paid a bigger income tax than the superrich Filipinos. While it explains why Kris does not have any difficulty changing gigolo-husbands, it does not explain why the richest Filipinos paid less. Where are the taipans and the tycoons? Where are the captains of industry? Where are the richest Filipinos on the Forbes Magazine list?  Where are the 10 richest senators and 10 richest congressmen who appear on the annual list of the richest Filipinos? Where are Henry Sy, Lucio Tan, Ramon Ang, John Gokongwei, Manny V. Pangilinan, Manny Villar? Where are the Ayalas and the other billionaires? Yes, they are on the top 500 list but way below Kris.

The Lopezes, owners of ABS-CBN, First Gen and Rockwell Land, complained, asking why they are not on the list at all. And Megaworld owner Andrew Tan sent a statement to the Inquirer, showing he paid more than P60 million in income taxes in 2011, bigger than the P49.8 million that Kris paid.

So what happened to their income tax returns (ITRs)? Did they earn less than Kris? Did they cheat on their ITRs? Do they have smarter accountants and tax lawyers?

Not necessarily. It is because the list of the 500 biggest individual income taxpayers is limited to those who filed individual ITRs only. If you had substitute filing (meaning, your company withheld income taxes for you and remitted them straight to the BIR, just like in the case of regular employees), you are not on that list.

As Internal Revenue Commissioner Kim Henares explained, “If you did not file an ITR because you had substitute filing… it doesn’t matter how big your salary and tax payments are. You will not appear on the list.”

Let me explain further:

The list of the Top 500 Individual Income Taxpayers published by the Bureau of Internal Revenue is determined by the amount of taxes paid by individuals on income earned from compensation, or from the practice of a profession or from business that is run as a sole proprietorship.

The following types of income received by most businessmen are not included in the individual ITR because they are already subjected to a final tax at source:

1. Dividends from investments in shares of stocks are subject to a final withholding tax of 10 percent.

2. Interest on bank deposits, money market placements and other deposit substitutes are subject to a 20-percent withholding tax.

3. Trading gains on the sale of shares of stocks listed and traded in the local stock exchange are subject to the 0.5- to 1-percent stock transaction tax that stockbrokers withhold and remit directly to the BIR.

The assets of many businessmen consist of investments in shares of stocks in various corporations:

1. We can call these shares of stocks in listed companies as “paper money”—that is, not actual “cash money.”

2. This “paper money” is the basis of the Forbes list of the richest Filipinos. Its value is based on the prevailing stock prices of the businessmen’s listed companies at the time that the Forbes listing is being prepared.

3. Their corporations also pay corporate income taxes aside from the individual businessman/shareholder’s.

The corporations generate employment and business opportunities (for manufacturers, distributors, retailers, suppliers, contractors, middlemen, and the like), thus greatly contributing to the overall development and growth of the economy. Employment and business opportunities generated by these companies translate into more tax collections for government.

* *  *

This coming May 1, Labor Day, labor groups will again be marching to ask for higher wages and more benefits for workers, as they do without fail every Labor Day. They will ask for more mandatory wage increases and the abolition of the hated “contractualization” system (by which employers, instead of hiring permanent employees, farm out the work they need—e.g., janitorial and security services—to other companies; or employ workers for five months only, then replace them with another batch for the next five months to skirt a provision of law mandating that an employee automatically becomes permanent after he/she shall have served for six consecutive months in the same company).

This time, however, the three biggest labor groups—Federation of Free Workers (FFF), Kilusang Mayo Uno (KMU), and Trade Union Congress of the Philippines (TUCP)—are aiming at different objectives. FFF and KMU are pushing, as usual, for higher wages while TUCP is calling for the creation of more jobs. As TUCP president and former Sen. Ernesto Herrera said, our immediate problem is the lack of jobs. Millions of Filipinos are unemployed. Labor should help government and investors create more jobs.

We need more investors to put up more factories and businesses. Right now, investors don’t want to come to the Philippines because of corruption, red tape, high power rates, and traffic jams (which delay the delivery of raw materials and finished products). If the labor component becomes too costly, investors stay away. If production costs are too high, the investors cannot compete in the international market.

Products from China and Korea are very strong in the world market because their labor costs are relatively lower. They can therefore sell their products for less. Products from the United States and other well-developed countries, on the other hand, are finding it hard to compete because they cost more to produce. Because of strong labor unions in these countries, wages are high and, therefore, production costs are also high.

“Let’s create jobs, first,” said Herrera. Let’s accept lower wages first. Then when the companies improve, we can ask for higher wages.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


More from this Column:

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Short URL: http://opinion.inquirer.net/?p=51207

Tags: Bureau of Internal Revenue , kim henares , Kris Aquino , nation , news , Tax



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Gloomy weather on Black Saturday–Pagasa
  • Mixed feelings for Gabriel Garcia Marquez in hometown
  • Korea ferry captain arrested, divers spot bodies
  • Enrile chief aide back in PH ‘to face charges’–report
  • Pakistan library named ‘bin Laden,’ as memory fades
  • Sports

  • Duke’s Rodney Hood joining Jabari Parker in NBA draft
  • Phelps entered in 3 events at comeback meet
  • Boston prepares for huge wave of marathon visitors
  • Motivated LeBron James preps for postseason
  • Nadal ousted by Ferrer in Monte Carlo quarters
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • OFW from UAE tests negative for MERS-Cov–health chief
  • Multicultural flock marks Good Friday in San Francisco
  • Las Vegas ‘Pinoy Pride’ fest hails Filipino heritage
  • Marking Jesus’ journey on Good Friday
  • Filipina accomplice arrested for fake bills in Malaysia
  • Marketplace