Friday, April 13, 2007

Taxes

"In this world nothing is certain but death and taxes."
- Benjamin Franklin

Who among you here loves seeing the withholding tax portion of your payslips? You might say, I could have bought something else with this. Or perhaps feel proud that you gave something to the government. Or maybe your mind is freaking out at the thought that a big chunk of it will go to the pocket of the corrupt government officials.

In early 1996, when I was still a newbie in the audit profession, I was assigned to do inventory-taking in the Tacloban branch of a large pharmaceutical company. On that same day, the warehouseman received his withholding tax certificate.

“I can’t believe the amount of the tax I paid!” he exclaimed, watching the piece of paper.

I took a peek but he willingly showed it to me. “The tax you paid is bigger than the amount of my salary for the whole year!” I told him.

He laughed. “You’re still young. You’ll earn more than I do now.” Then we totally forgot about the tax thing.

What is tax? By definition, it is a charge levied upon groups, businesses, persons or things by a government. It could be a direct tax or an indirect tax. The funds generated from taxes are used to run our government, promote stable economic growth, and lessen inequalities in the distribution of income and wealth. Taxes are supposed to be used in a good way. We may have seen road improvements with banners saying, “This is where your taxes go”. But don’t expect the same message to be bannered in a politician’s mansion.

We live taxed. We die taxed. Your vices are costly because of the sin taxes. Imported goods are heavily taxed. The beggars on the streets are taxed (indirectly). They are also supposed to pay tax on the proceeds from begging (how cruel!). Thieves are supposed to be taxed. Income from legal and illegal (who dares declare?) sources is taxable, unless there is a law exempting a specific income source.

If you don’t want to be taxed, go live in caves and in the mountains. Good thing we’re not yet taxed for blogging. By the way, this Monday (April 16) is the deadline for filing returns and paying taxes. I know accountants are very busy right now.

19 comments:

fence said...

not all dude, not all. Some of us are just blogging their life away. :)

lazarus said...

i should say 'most accountants are busy right now'. And a few still blogging. he he he.

carey said...

yikes... being taxed for blogging? that's kinda scary.

sasha said...

You know what, Lazarus, I'm part of the big chunk of the population who HATES taxes! If I see an improvement in Quezon City, maybe, just maybe, I'd be proud to have contributed to the improvement of the city. But hey, I don't see any improvement at all! Daming nagkalat na basura, lasing, pulubi at kotong cops sa paligid, if the tax deducted from me was spent to hire someone to monitor all these, naku, malinis na ang paligid!

And when I get my 2316(W2), my heart bleeds talaga. My bank account doesn't even have a quarter of the tax deducted from me for a year!

Usapang tax really makes me crazy! Hahaha

I'm kinda cramming right now kasi yung friend ko who has a business told me that she wants their ITR done pala. Pero bloghop muna bago balik ITR :)

Happy weekend, Lazarus! After Monday, gffs and gis naman :)

niceheart said...

Here in Canada, deadline is April 30th.

I've already submitted my income tax return and have already received my income tax refund. :) It will be used to pay part of my son's NY trip.

Anonymous said...

their is something worse to what you just said:

1. if you pay high taxes, they assume you cheated more. so what's the point of declaring honestly.

2. there are things that are not subject to tax... those that go right into the pockets of these tax collectors.

sad realities...

Anonymous said...

their is something worse to what you just said:

1. if you pay high taxes, they assume you cheated more. so what's the point of declaring honestly.

2. there are things that are not subject to tax... those that go right into the pockets of these tax collectors.

sad realities...

Wil said...

I read this book called Rich Dad Poor Dad by Robert Kiyosaki (i'm sure you've heard of it), but in the book, he says that one way of reducing one's taxable income is by starting a business. With a business, you can deduct your expenses and so your tax burden is also reduced. According to him, business owners are taxed less while employees are taxed most b/c of all these benefits (or loopholes, depending on your opinion). Of course, it's not that easy to start a business, but it's supposedly better in the long run, according to the author.

M I C H E L L E said...

oh what a good reminder, our deadline here is on the 30th... i'll file mine before the deadline, hoping humabol.

Ferdz said...

Argh! Taxes, ang laki ng bawas. Good thing some companies are getting smart by lessening taxes by addiing allowances and all pero malaki pa rin.

snglguy said...

Man, it's been 5 years since I last paid my dues. But then, it's been 5 years since I last had a job, hahaha. :-D

I wonder how they'll tax a jobless bum like me anyways?

lady cess said...

i hate hate hate paying taxes in pinas. i heard first world people feel ok paying taxes they see where the money goes. dito.. hay mahabang usapan yan...

Daisy said...

Tax? hay buti na lang graduate na ako dyan. we used to cram basta malapit na deadline, filing and all. minsan lagpas pa sa deadline hehehe kaya bayad na lang ng penalty...
US bloggers who are earning thru blogs are also taxed.

zherwin said...

to make things better, just think of taxes as the perk of being employed. taxes, perks??? haaayy :)

hmm, i maybe one of the few accountants who's not busy today as i no longer transact with the BIR, working in a tax-exempt company has its own perks in this time of the year.

Lazarus said...

carey, if you earn income through blogging, you are also taxed. A certain percentage will be withheld. That is if they follow the rules.

sasha, naku saan kaya napunta ang binabayad natin na tax? Too bad the government is not using it well.

niceheart, the refund becomes some sort of a forced saving. Here in RP, if you ask for refund, priority ka agad for BIR audit.

anonymous, these are really sad realities.

lazarus said...

wil, there are tax benefits for corporations na wala sa ordinary businesses. We have a progressive compensation tax system; the more you earn, the more you pay. But there are some who are good tax planners.

michelle, better file early.

ferdz, there are taxable allowances. kaya nga some requires certain liquidation para di ma tax.

snglguy, if you don't have work, you are also taxed indirectly; Sales tax and the VAT passed on to you through the goods you purchaae.

cess, kakainis nga if the tax you're paying ay mapunta lang sa mga corrupt officials.

Daisy, wala bang tax dyan?

zherwin, are you working in an NGO? Anong tax exemption nyo?

Francesca said...

mas matindi dito sa France! 21% salary tax, 19.6% if you but goods, theres lodging tax, house /property tax.
At the end, wala na maiiwan !

All collected on December months, kaya pasko dito di pwede bongga, kasi la na kuarta, lol.

teka, kano nadale ni Lola Gloria sa taxation mo this year???

jho said...

Yahoo!!!! Tax season is over!!!! More time for blogging, hehehe.

Sometimes i wanted to just ask my husband to give me a waiver para ako na lang ang magdedeclare ng additional exemption for my kids sayang kasi e. pampaliit lang ng tax to be deducted from my salary... Sigh,,, he wouldnt give me i know. Pride siguro.

tutubi said...

problem is that those who pay taxes are mostly employees who can't do anything

other professionals like actors, doctors, photographers can misdeclare w/o being caught :(