Transportation Secretary Manuel Roxas II and Senator Ralph Recto were at loggerheads lately on who subsidizes whom.
Senator Recto argues that Metro Manila is subsidizing the provinces based on the fact that just three cities in Metro Manila—Makati, Quezon City and Caloocan—contributed P281 billion of the total collection of P337 billion collected nationwide last year. How do we explain the “exceptional ability” of just three major cities in Metro Manila contributing 83 percent of the nation’s tax collection?
It’s really a fallacy. Here’s why. A substantial part of the country’s GDP is contributed by export industries such as mining, fruits, sugar, coconut oil, electronic products, etc. What is common among these companies? Their revenues are derived in the provinces. But their head offices are located in Metro Manila—where they pay their taxes, of course! No sweat, Metro Manila, huh?
What about the big companies selling their products and services in the provinces—airlines, shipping companies, power companies, banks, malls, petroleum products, cigarettes, liquors, beers, books, office supplies, cars, trucks, heavy equipment, computers, cell phones, telephones and many more? Where do they pay their taxes? In Metro Manila, of course!
In case it’s not clear yet: Metro Manila is unfairly claiming credit for tax collections on revenues generated in the provinces. So who’s subsidizing whom?
—ISMAEL D. TABIJE, idtabije@gmail.com