This is the eleventh in this ongoing series for practical people, both Filipino and foreign who care about the country of the Philippines and would like to do something, within their own means and power, to make it a better place.

Today’s excerpt is one that ought to get a lot of attention especially from my foreign readers.  Especially those of us from the US, where being anti-tax is more than a hobby, it’s much more like a religion.  Witness a few months ago when the US was ablaze with so-called “Tea Parties”, protesting what are perceived to be very high taxes.  In actuality there are only two  developed countries with lower personal tax rates than the US (Iceland and Ireland, and both of those countries are  currently bankrupt or close to it) so maybe we in the US don’t have it that bad.  Be that as it may, in the Philippines personal taxes are certainly higher … so why should anyone be interested in paying them voluntarily? 

Here’s one possible reason.  Ask virtually anyone from any country to describe the Philippines in economic terms and the chances are huge the within the first few words are going to be phrases like ‘poor’, “Third-world”, ‘developing’, and so on.  Speak to any Philippine politician or teacher or newspaperman or Jeepney driver about why the Philippines has so many poor people, why this sad thing or that horrible condition is allowed to exist and you are almost 1,000% percent certain to get money as the primary reason that the country isn’t doing better.

But the Philippines is not intrinsically poor at all.  It’s not saddled with trying to feed a population from a barren desert like the Sudan, or spending 50% or more of the people’s energy on just staying warm and scratching for a living off frozen tundra like some nomadic tribe in Siberia … the Philippines is a semi-tropic environment with rich soil, abundant rainfall, a location central to heavily populated areas of Asia, a national infrastructure, developed agriculture, able to beat out powerhouse nations like India in IT and business technology … I can go on, but you get the drift.  The Philippines actually has a lot going for itself economically.

Then why is the country so chronically strapped for cash?  Well I would submit there are a lot of reasons, but one primary one that is as obvious as the node on everyone’s face:  The country does not have the will to collect the legal and constitutionally authorized taxes.  It is simply astounding to me, as a foreigner “looking in from the outside” so to speak, how pervasive this problem really is.

The Bureau of Internal Revenue, in charge of collecting corporate and individual income taxes seems to operate about the same as a beggar seeking handouts … only they are no where near as persistent.  Only a few years ago, the present administration instituted a ‘ground breaking’ BIR program called RATE (Run After Tax Evaders).  The program, to the extent it has been applied has been a whopping success, actually going after tax evaders and demanding payment.  But by their own figures the program has only touched less than 2% of the tax evaders already know by the government.  Billions in unpaid taxes, millions of people who need a job and a constitutional mandate to collect what is legally owed to the country … if this isn’t an opportunity just going begging, I have never seen one.

And property taxes.  The fundamental building block that supports the programs of every province and municipality.  It borders on insanity in my view.  Taxes go unpaid on commercial and residential property for years on end and nothing is done about it.  The provincial coffers are empty, hundreds of thousands of property owners scoff at the law, and virtually no one seems to care.  Talk about culture shock.  In the US, if you don’t pay the taxes on your property holding in a year or so, max, the property will be sold for back taxes at public auction.  If you do settle up the taxes at the last minute before tax sale, you will pay a healthy penalty in late fees and interest.  And why not, to my way of thinking.  You had a just debt and you failed to satisfy it … everyone should be acco8untable for their legal obligations.

In the Philippines, many people wait five or more years before paying the taxes on their homes and the the taxing authority, for reasons I can not fathom, sends them out a ‘final notice’ which a hefty discount offer, almost 20% in some cases, as a reward for shirking their duties for five years or more. 

Folks, this is no way to run a railroad … or a nation.

In my province, Bulacan, the previous governor who left office a few years back was known throughout the Philippines.  Unique among the other 81 or so provincial governors she took a bold, innovative and virtually unheard of step.  Can you guess what it was? 

She instructed the provincial tax collection office that they were to be held accountable for unpaid property taxes and instructed the head of the department that he was to collect taxes, report to her on the progress regularly and if collections fell off and missed their target, he world be fired. 

It was news about as earth shattering to the rest of the country as reports of a new volcano erupting.  Teams of provincial employees from all over the Philippines made trips to Bulacan to observe how the simple business of tax collection could be done.  Some went home and improved some procedures in their own province, the majority though, left shaking their heads, commenting that it was all very well for Bulacan to brag about their success because, after all, they were a rich province, not poor like our little province.

The simple logic that Bulacan had money to pay their bills and even money to computerize property tax records simply  because they had the gumption to tap the source of money they already had access to was … and still is … lost on most people. 

Provinces (and nations) are not poor or rich by some luck of the draw like a poker game, they are poor or rich based on how they exercise their national responsibilities and how they make use of the assets they already have.

Paying your taxes will make the Philippines a better place for all, I guarantee it.

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