'Principles' of Taxation: Drawing Lessons from the Pacquiao-Henares Exchanges

Reference to ANC Yahoo News

"Henares to Pacquiao: Don't make BIR look bad"

No! It's not the 'legally' delinquent Manny Pacquiao that has been ruining the credibility of the reforming BIR under the leadership of the very professional reformer Kim Henares. Historically, it has always been the government and its functionaries that make the Bureau and the system of taxation that it enforces look bad.

Source: ANC Yahoo! News

The popular public support on Pacquiao's grievances is just a symptom of the fundamental causes of people's historical distrust in the BIR. A critical cause of civil disobedience has always been the felt and perceived ineffectiveness, unprofessionalism, inefficiency, and lack of creativity of government agencies from the DPWH to DOTC to DOH to LGUs and the corrupt pork barrel system of the elected officials.

If ever Henares fails at this point, I won't blame her. I'd rather call on the people to press on her colleagues in the bureaucracy, counterparts in all government agencies, and the elected officials who have failed her creative and committed reform agenda at the BIR.

Since I'm not a tax lawyer/accountant and not a paid institutionalist analyst, I'd like to emphasise the importance of this current public issue to raise awareness and consciousness about the "principles" of taxation. At this stage of our development process, it's important that the BIR led by Henares also educate the public regarding the "principles" of taxation, and not just the "rules" of taxation.

A core principle in taxation is that it must be viewed in "relational" terms — that is, it is a social contract and relationship between the state and citizen taxpayer. As such, both the state and the citizen have rights and obligations. But there's a problem if the state only asserts its rights to tax citizens without fulfilling its obligations to provide for social welfare, infrastructure, and other programmes for development and redistributive justice.

Why am I not much into "rules" of taxation in the Philippine context? Based on my academic understanding, the enduring Philippine tax code, including the E-VAT law, has historically been capitalist and essentially elitist that is technocratically designed to protect bourgeois class interests and the preservation of the system of private property relations by putting a heavy tax burden on the poor and the hardworking middle class without sense of equity and social justice.

In this so-called 'reform' process — or, what others call process of 'nation-building' — the existing unjust 'rules' of taxation need to be seriously questioned, examined, and reformed. This is to be done by coming up with new 'principles' as the bases for 'rules' of state taxation that embody the collective interest and welfare of the Filipino people's existence in pursuit of the good life.

Pacquiao, Celebrities, and Taxes

Here's my initial take on Pacquiao's recent scuffle with Philippine tax authorities....

Source: Inquirer

I'm a fan of both the boxing legend Manny Pacquiao and the professional tax reformer Kim Henares. I think that they both excel in their respective professions with shared interest in realising a better Philippine society.

So far, it seems that Pacquiao is not fit as a 'lawmaker'. But let's admit it that, given the sad realities of our social system, as a 'public servant' and a public figure, Pacquiao has touched and inspired much more lives — psychologically as well as materially — than any Filipino politician or celebrity that I/we know. Compared with other politicians, at least we all know the whereabouts and activities of Pacquiao. Given current social circumstances and his life's history of privation, Pacquiao has done a lot of good things to the Filipino people. Based on the logic of taxation, the Philippine state — as such, the Filipino people — has an interest in a successful boxing career of Pacquiao because the state gets balato from his earnings in the form of income taxes, which are then used for public services. Through taxation, this, in a way, gives credence to Pacquiao's monicker as the 'People's Champ' or the Pambansang Kamao. In principle, the state, in return for citizens' payment of taxes, provides rents in the form of incentives, protection, or other social provisions. (The US government, for instance, goes as far as militarily protecting the local and global interests of US-based corporations.) To maintain a harmonious relationship between the state and taxpayers, both of them must be engaged with a mutual give-and-take relations.

Wish Pacquiao were surrounded by competent, trustworthy, well-meaning, and professional circle of advisers, friends, and partners. As a young public servant (almost my age), I regard him as a work-in-progress, but one who is very receptive to ideas and learning. I believe that Pacquiao's heart is in the right place and that's a very good foundation for sharpening his mental faculties in making political decisions.

To those who are uneasy with a multi-tasker boxer-politician-businessman-celebrity Pacquiao, please note that in some developed countries like in Scandinavia many professional athletes have day jobs. An indicator of a progressive country is that being an elected government official is considered as just one of those professions, one of those day jobs. This remains my dream for the Philippines to attain a certain level of economic development with huge division of labour and a multitude of professions where people are no longer hypnotised by the lives and ways of the rich and famous simply because they have their own decent source of income, reliable state support mechanisms, and a personal sense of a meaningful life. Unfortunately, ours is a star-struck society with vicious patronage politics, poverty, inequality, and unemployment so the tendency is that the people depend and demand too much from, and are captivated by the lifestyle and affairs of, their patron-politicians and idol-celebrities.

In socio-economic developmental terms, there's really something seriously wrong if our country's biggest individual taxpayers are the celebrities. Among other things, this tells us about our backward economic mode of production which substantially determines the wealth-creating capacity — and thereby the scope of redistribution — of our nation. Here's a development common sense: A nation of boxers and celebrities won't be as rich and progressive as a nation of engineers, scientists, and entrepreneurs.

Come on, truth be told, Filipino celebrities have been working so hard, busting their asses. They have delivered, honing their crafts and giving honour to the country. They are also part of the working class — with no 'job security' and subject to exploitation of those who pay them talent fees and those who tax their earnings. They, too, have all the right to voice out their legitimate grievances.

For the purpose of lesson-drawing, I highlight these notes from a blog entry last year entitled 'Taxation, Production, and Redistribution: Challenges for Philippine Development':

In taxation, policy coordination of all government agencies is a must. Otherwise, there will be a conflict between the overly enthusiastic tax collector and the disgruntled citizen taxpayers. In a word, the fundamental principle applies, the people must pleasantly feel and see how and where taxes are spent. It is the task of the government to make people appreciate and realize that taxation is a collective social development process in which the conduct of business — the producing, selling, and buying of goods and services — is a social activity that has socio-economic consequences and implicates the entire society. 

...[T]here will be conflicts especially in a situation where the government only enforces its right to tax people without fulfilling its responsibility to create conditions for 'full' employment, let alone 'formal' employment.

NGOs and Disaster Response

Here are some important pointers for relief and reconstruction efforts of NGOs and other volunteers now in the Visayas: '10 tips for NGOs responding to Philippine typhoon'.

It's also good info for others concerned and interested to make them realise that relief operations are not that easy. Aside from the complexity and urgency of the problems to be addressed, there are a lot of other actors and interests involved in the operations. This is, of course, not an excuse for government's slow response to disasters. The ability to respond to disasters is a central indicator of government effectiveness.

Source: Rappler

NGOs have gotten a bad reputation in the Philippines these days due to the reported fake NGOs made up by Janet Napoles and the pork barrel scandal. But, this essay from ReliefWeb shall give the uninitiated an idea of what 'real' NGOs actually do.

Relief operations is a profession. For the academically-inclined, it's an area covered in our 'development studies' program.

To be well-meaning and voluntarist is not enough, there's art and science in disaster response, relief operations, and reconstruction efforts.

State Capacity vis-a-vis Climate Change

Reference to Rappler's news:

"Mar Roxas to CNN: No response fast enough"

Source: SciLogs

Politicking aside, what Mar says here is true! Precisely my point. The Philippine government and the entire Filipino citizenry need all the help we can get from the international community. No government, particularly of a poor country like the Philippines, is prepared and equipped enough to confront the climate change monster and the sufferings it inflicts on human beings. Why too much stress on 'state capacity' and so little on the insurmountable gravity of climate change-induced disasters? 

Instead of vilifying poor country governments' inefficient responses to disasters, why is CNN not asking the most fundamental of questions that implicate the establishment that US mainstream media, including the CNN, are protecting: the USA's military-industrial complex and the ecologically-degrading capitalist mode of production it promotes?

* * *

In fairness to the report of Anderson Cooper, do check it out again. He never said categorically that there was 'no government presence': http://www.youtube.com/watch?v=S7tWq59PcJM. 

Let's stop all these unnecessary bashings and demonising and propaganda with the obvious intent of advancing a particular political-electoral agenda for 2016. This is for our brethren in Leyte and the Visayas; this is for our common good!

Media and Climate Change: PNoy's Dose of Own Medicine

I have long noticed this patented habit of the PNoy administration to resolve controversial issues through denial, pass-the-buck, and media spin strategies. This bad habit manifests again in this interview of PNoy with CNN's Christiane Amanpour. My reading of mainstream and social media sentiments seems to point to an unfolding bitter fate of this administration: the habitual denier/blamer/spinner getting a serious dose of its own medicine!

This globally broadcast interview could have been an opportune time and space for PNoy to make a strong message about climate change and amplify the call for climate justice. No nation-state, not least a government of a developing country like the Philippines, can effectively address climate change-induced disasters and human sufferings on its own — thus, there's an urgent need for committed and concerted actions of the world's community of nations.

Unfortunately, the 'liberal' PNoy does not have in his vocabulary the principles of social and ecological-climate justice. By pointing to the real historical-structural causes of this insurmountable tragedy requires an honest admission of the limitations of a single government's capacity vis-a-vis the evils of climate change. To say the fundamentals of the problem — i.e., the historical structures of climate change and underdevelopment — is not resorting to denials, pass-the-buck, or media spin; it's about telling the truth!

Of course, especially at this time of national emergency, we should extend to the government all the support that it needs. While we each do our civic duties and sense of humanity, criticisms in a democracy are alright for some important feedback and also to keep the authorities on their toes.

Still, let's be for hope!

Emergency Aid to PH: Tak, DK! What's up, CN?

References to:

- Politiken.dk "Danmark sender mere nødhjælp til Filippinerne"

- Reuters.com "China's meagre aid to the Philippines could dent its image"

Source: Scandinavia and the World

Denmark has increased its emergency aid to the Philippines now totalling 42 million Danish kroner (around 7.5 million US dollars or 350 million pesos). As practiced, this fund shall be channelled through the United Nations and I assume that it will be part of Denmark's regular contribution to development finance, particularly the financing of the Millennium Development Goals. 

Here's a fact that I personally appreciate despite some issues I have with aspects of the Danish foreign policy: Denmark always fulfils its development commitments under the UN Millennium Project to provide at least 0.7% its gross national income (GNI) as aid to developing countries. The same holds true with regard to the other Scandinavian countries Norway and Sweden.

Source: TheEnergyCollective.com

Sorry but I just have to mention something disappointing. While the Philippines should be thankful for any donations and help received, I really am not sure if China — currently the world's second largest economy and world's number one greenhouse gas / carbon dioxide emitter — is making a strong statement or showing its true colours for only giving around 200,000 US dollars (around 8 million pesos) to the Philippines. We could only hope that the Chinese government is not taking the ongoing territorial disputes personally. Anyway, as I used to ask our Chinese trade union counterparts: Where is your supposed 'socialist' or 'communist' sense of solidarity, China?!?!?!

* * *

Updates, as of 14 November 2013:

- The New York Times, "China Increases Aid to Philippines"

- Follow report of the Philippine government on its actions and responses to the crisis, including foreign aid it has been receiving here.

Notes in the Aftermath of Super Typhoon Yolanda/Haiyan

To my international friends and colleagues:

Source: National Geographic

Thank you for your thoughtful messages of concern and solidarity. It's horrible; I can't help but cry watching the news and seeing those ugly images. None of my immediate family and friends have been harmed by the super tropical cyclone, but I know of friends who are still unable to communicate with their loved ones in the afflicted areas. Aside from my brother, who works in the media and is currently on his way to the affected province of Leyte, I can only pray and wish for the best for the safety of my sponsored child and her family living in a remote and poor rural area in Leyte. In your own little ways, please extend immediate help and continue to fight for social, ecological, and climate justice.

To my articulate and well-meaning Filipino friends from the academics to the activists to the religious:

Please be reminded that there's a proper time and place for every thing. I do understand your arguments and sentiments. But at this very moment, we have fellow human beings in the Visayas who need immediate help, rescue, relief, and comfort.

To the Filipino people:

Resilience is a virtue so long as it means hope and active learning. Prayers must coexist with action. Faith is best combined with science and technology. A critique on historical corruption of our political-economic elites and government officials should be extended to a ruthless criticism of the dominant capitalist model of overproduction and overconsumption and of the unjust political economy of climate negotiations, as well as to a serious reflection on how we re-organise our lives and communities in ways that respect the natural relationship of nature with humans.

To my dearest child:

I am sorry that you have arrived at a world replete with so much sufferings, vulnerabilities, insecurities, privations, and injustices. But life in itself is beautiful; and it can stay as beautiful as it is. We just have to struggle hard for the world to rediscover the beauty of nature, social relations, and human life. We shall continue to be conscious of our decisions and actions in life in ways that make as part of the solution and always on the side of justice, humanity, hope, and love.