One of the reasons many Westerners give for visiting or moving to the Philippines is the common use of the English language. It makes a person feel at home … or lets lazy people like me neglect to spend time learning any of the common Filipino languages such as Tagalog. But one of the things visitors and potential residents need to understand is, just because English is often spoken (and is, indeed, one of the Philippines “official” languages), do not expect that English is English is English. As the words of a song say, “It ain’t necessarily so”.
Let me look for a minute at a word meaning/usage situation that came up for me starting a few weeks back. A reader left a comment that stated, in part, “… other good qualities of Filipinos are that they are meek…”
Are Filipinos meek? Well that’s certainly open to debate, not one I will open up here, but what I will open for discussion is, just what does “meek” mean? many of the folks reading this are Christians, so it’s common for those of us who are to think of Matthew 5:, “Blessed are the meek, for they shall inherit the earth”. After all, to a Christian, what could be more authoritative than the words of Christ himself?
That is true only if we are very careful in deciding what we really mean by meek. A generally accepted definition of “meek” is to be gentle and considerate of others. In a great many ways you will see this in almost every interpersonal interaction. In fact many Filipinos seem to have mixed up “meek” with “subservient” or even “fawning. This is not only disturbing to Westerners at times … I am not “Sir David” and it does me no favors if I ask if some action is possible or acceptable and I get an “Oh po” (yes, sir) in reply when actually what I want is not the right thing and an honest “Hindi po”, (no sir) is the response that should be made. This isn’t unique to the Philippines, by the way, it’s somewhat of an Asian-wide custom … sometimes “no” is the hardest answer to obtain, even when that’s the answer that will really serve the questioning person most honestly. It is perfectly possible to be both “meek” and “honest”, if you truly understand what “meek” means.
This perversion of “meekness” often manifests itself in the issues I talked about in my last post, where people somehow confuse modesty, politeness and “meekness” with taking advantage of opportunities that are not only their right, but sometimes even their duty.
Let me give a couple examples that ought to serve well. Quickly now, how many who are reading this like taxes and tax collection agencies? Thought so. But how many of us accept that taxes are a fact of life and have their role in an organized society … mainly to provide basic human services. So we pay, and we certainly expect that the authorities charged with tax collection are going to do their jobs.
Now virtually everyone agrees that the Philippines is a poor country and many of the ills of the country in general could be cured, or at least improved upon, by an infusion of funds.
But let me acquaint you with something many people don’t know. The Philippines is not nearly so poor as it is naturally … it’s as poor as it is, to a large degree, by mismanagement. What specific mismanagement? Simple. The agencies charged with collecting taxes don’t.
Take a look at income taxes. Just recently on 5 year “Amnesty Program” just closed out and another is due soon. Amnesty from paying individual or business income taxes. You can pay your income taxes here if you chose too, or, you can just ignore them and wait for the government to include you in an “Amnesty Program” which lets you make a negotiated, token payment and then go on your merry way. Mind boggling. The official stance on these programs? “Well at least we get some money from these tax evaders, otherwise we get nothing at all.” Excuse me? What about the law that clearly determines that people owe taxes and must comply. Doesn’t anyone have the glimmer of a thought about hauling those who make money and don’t pay into court? seizing property, collecting what is due? Is this “meekness” in it’s most perverted form? You be the judge.
Not long ago my wife and I visited a town in the provinces where she and several members of her family own property. We stopped at the Municipio (Town Hall) to bring the property taxes up to date on all the parcels in question. I was pretty shocked to find that some of the parcels hadn’t had the taxes paid in years and years. In another matter we paid some overdue taxes on another property as a favor to the owner (because we might be doing some title work on that property and wanted everything clear and legal). The owner’s response? Oh I never pay until after the taxes are more than 10 years overdue … when they get that far behind the town will send a letter offering a settlement (for a much smaller sum) of what’s due over the past years. So, in other words, why bother paying taxes as set by the law, the tax collectors will settle for less, just ignore it all for now and worry about it in the future, if you have to.
See what I mean about the Philippines being artificially poor? The former governor of our province here, Bulacan, attained national notice during her term for a program she instituted, unique to all the Philippines provinces. This is really a foreign initiative to some. Know what it was?
She required the county tax authorities to a., bill and collect property taxes as they came due and b…, rated job performance, raises and even job security of these officials based on how much they collected.
Sounds a bit simplistic and “so what”? Well it was a very, very unique program in this country, even had a number of TV documentaries produced covering the program, and management staff from many other provinces visiting Bulacan to learn how it was done. So again, you be the judge.
If meekness a desirable quality? Obviously, as opposed to arrogance and insulting behavior it certainly is, but somehow, as it seems to me, “meekness” here in the Philippines has become confused with the definition of negligence and dereliction of duty.
The Philippines might not be considered a rich nation even if all the taxes did get collected, but I do think it would go a long way toward getting the country on its feet and even, perhaps, feeding a few starving people and educating a few children with no present opportunities. What do you think?
Hi Dave – A few neighbors won't pay their property taxes until "that letter" arrives. To them, it isn't a matter of a more favorable settlement, but a means of making a political statement. They believe that politicians' and officials' pockets are lined with tax money; there is seldom any evidence of their taxes funding a municipal project for the benefit of taxpayers. To thwart an "additional payday," they "postpone" their taxes. Sentiment runs something like, "If we can't vote them out of office, perhaps they'll leave on their own if they don't have a jingle in their pockets!"
@Paul: Indeed I would suspect that's a common sentiment, Paul. There are always two sides (actually many sides) to most arguments, but I think you'd agree the same feelings exist in other countries as well. For the tax collectors to be so weak-kneed as to allow this practice to be 'the norm' across the country is, indeed, a big part of the problem … anyway, I already know there are tons of money out there, uncollected. Proper use of those Pesos after they get collected is, indeed another story in itself. Thanks for commenting
Hello Dave,
It can very hard to make comments on other cultures without somebody labeling you as a rascist, arrogant or just down right interferring. Filipinos are not different.
The thing is meek or subservient people is they will talk about you,but not talk to you. Also they show very little initiative and nearly always expect somebody else to solve their problems for them.
As for the meek for they shall inherit the earth, they will be to busy sitting round the table discussing it until they decide not to do it.
The problem with the Philippines is it does not have a strong government, I do not mean it sends its army or police to beat up the general public like a Totalitarian government is sometimes prone to do . But a government that will do the right thing by its people it is supposed to govern.
Unfortunatelly the government in the Philippines is very much controlled by the rich and they can get away with anything they want. If they are not paying any tax, then why should the other people pay their taxes. Unfortunately this attitude is very detrimental for the people, because nobody benefits in the long run.
Think with all taxes paid you would get better government, less corruption because the police and public service would be paid better.
much improved infrastructure, better hospitals and education, plus numerious other spin offs that government provides.
Steven
@Steven: Hi Steven. I guess we need a dictionary as well, because my sense of your comment is you confuse my advocacy of government workers being strong in their charter to actually perform their duties with what seems to me to be a different slant
Where I feel we will always differ significantly is in areas like the belief that 'the government' has a role in providing infrastructure. I feel that is very much an outmoded way of looking at it. I started to write more, but it's already turning into at least a whole magazine article, so it will follow in due course.
Meanwhile, remeber that even if our points of view differ on some of these issues I really value your readership and point of view. Many thanks.
As a dual citizen, we also pay real estate taxes in the Philippines. The Philippine government is not aggressive in collecting the taxes. But just recently, we found out that if you pay your taxes ahead, that is before December 31, you will receive a 20% discount, which could be substantial if you have a lot of property. This was never advertised, so a lot of tax payers will wait until March 31 to pay their taxes or not pay at all ( or wait for 10 years as Dave S. stated)
On the other hand, VAT ( value added tax).( just like a sales tax) is sometimes taken ahead before the government pays the merchants for government business expenses incurred in my province. This is not probably practiced in other provinces or cities in the Philippines. Am I correct?
@David B Katague: I never knew there wasd a discount for early property tax payment, David. Thanks for tipping me off on that … well check before the end of the year, as a 20% discount is worth taking.
It interesting how that word aggressive creeps in … that's the reason many of my Filpino freinds give for the state of the country being too poor to fix the gaping holes n a road or a caved in school roof, while millions of pesos are uncollected so the tax collector can be a 'good fellow' and not appear 'aggressive'.
I guess when I buy somehting at the mall the sales clerk is 'aggressive' because she typically requires me to pay before I can leave with my merchandise. Another case where where two countries are separated by a common language … words such as 'aggressive' don't actually mean the same thing at all to some of us. Kind of like the current trend of calling bribery 'over pricing'. If you go to the store and the clerk charges you 20 esos fro a 10 peso item, that's 'over pricing' … but there is no bribery and bid-rigging involved as there is in all the current news articles about 'over pricing' on this or that contract. Perhaps the reporter just has too much 'delicadsa' to call a thief a thief.
Sorry I have no knowledge at all about how the VAT works … interesting, though that since it was implemented a fewyears back the Philippines has been actually paying off loans.
Dave,
VAT is Value-Added Tax and is simply a form of sales tax. The VAT is equivalent to 12% of the gross selling price or gross value in money of goods or properties sold, bartered or exchanged. In the case of imported goods, VAT is based on the total value of the goods as determined by the Bureau of Customs plus customs duties, excise taxes and incidental charges. While the obligation to collect and remit rests with the seller, the cost of the tax may is passed on to the buyer, transferee or lessee of the goods, properties or services. A VAT registered entity may credit the VAT paid on purchases of other goods and services against the tax on its current period sales of goods or services. If the amount of input tax is greater than the amount of output tax, the excess may be credited against succeeding period output VAT. VAT registered entities are required to issue an invoice or receipt for every sale and, in addition to regularly required accounting records, they must maintain subsidiary sales and purchase journals exclusively for VAT purposes. VAT reports must be submitted on a quarterly basis, twenty-five days after the end of the quarter. VAT payments must be made on a monthly basis
It wasnt implimented a few years ago but was rather just expanded and increased to 12% from the previous 10%.
What I always found much better in the Philippines was that the sales tax was generally added allready into sticker price of item you wanted to buy so that the price you paid was price you saw on price tag unlike in America where sales-tax is added at time of purchase in addition to the price on tag. In end it achieves same result but Philippine method is just much simplier for the buyer.
BTW, Very nice article and your correct the tax system needs a complete overhaul but not only in the manner its collected but also in manner the money is redistributed.
I also didnt know property tax could be less for advance payment but also that can work on cable, phone, internet , rent etc as well. We paid all of our bills in Philippines 1yr advance minus the bills like water and electric that changed on monthly basis and recieved quite large discounts for doing so, especially on rent. Just be sure to protect yourself by writing in contract that any repairs or improvements will be deducted from next years rent or payable to you by landlord should they decide not to renew the contract. Also, Put in contract that you can avail same price for advanced payment the following year etc..
Its is good to pay your property tax though especially if you own several pieces of land because if you dont pay your taxes and ever decided to sell a single piece of land all the taxes will come do. I know of situations where people have serriously good land that they cant sell a piece of because if they do millions of pesos in back taxes will come due at once.
Out of curiosity, I wondfer if person could buy tax liens in PI and forclose on propertys if money isnt paid in certain period of time. I think it must not be possible or many people would be doing it but if possible surely would create a good way to get good propertys at cutthroat prices.
Justin
Hi Dave, this is my first time commenting on your blog. I often visit Bob's blog. Very nice to meet you. I plan on moving to the Philippines as my fiance is from Mindanao. I will be visiting in March but plan on making my BIG move in 2010. My view on taxes in PI is the same as my view here in the USA or anywhere. The very rich, anyone making over a certain amount should be forced to pay taxes to support the government but the poor should not if they are living near the poverty line. It should be easy to come up with a figure amount, enough to make sure everyone has the income to support their basic needs. Food, shelter, clothing, education. It is the wealthy who own multiple properties and businesses that should support the Infrastructure that enables them to be successful. Just my views on it..
Happy New Year
Can't feed the pig if you starve the owner ….Unless the Philippineo people stand up and do something, nothing will happen … Phil n Jess
Hi Dave,Thanks for commenting and sharing your thoughts, Have to say I don't share your thoughts, though. I'm very much in favor of a flat tax on income, one rate for all, rich or poor. Every scheme ever advanced to 'soak the rich' is unfair in some way and they are all regressive … they discourage the 'rich' for investments and business that helps the poor and builds a county's base. Flat tax is as fair and democratic as you can get. We need _more_ rich people, not fewer.
Anyway my real point in the article is that the Philippines don't collect most of the taxes that are already on the books and already due and payable. A great deal of the government's inability to get things done isn't lack of money, it's lack of collecting the money already waiting.
If Rusty reads this he'll get a chuckle, just a few days ago the Philippine BIR (the Philippiine analog of the US IRS) announced they would continue a trial program that seemed to work .. RATE (Run After Tax Evaders). After years of experimentation it's come to light that people aren't paying their taxes voluntarily, but if you send revenue agents to knock on their doros a lot of money rolls in. Amazing 😉
Hi Dave,HAPPY NEW YEAR TO YOU AND YOUR FAMILY,Chas.
"…What specific mismanagement? Simple. The agencies charged with collecting taxes don’t…"
As a libertarian, I must fundamentally disagree.
I have a problem. According to my inlaws they own this piece of property back when the owner was still living it was given to them with out paper works…It was way back when papers weren't popular yet or question. But now they have a problem the family or the son wants the property back after all this years my inlaw the one who take good care of the property and pay all the dues and taxes..What is there rights of the property…am very confused who it belong to. Its very own fair bacause the propery as of now been renovated and build a house. However, one of the son already volunteer to give up the propery, but the other son won't because it belong to him. Who have more rights if all this years my inlaws the one who spen money on that property. It was neglected by the real owners. Pls help?????
Hi Marie, thanks for being a reader and for your comment. Sadly, though, I have no idea how I can help. First, I'm not a lawyer. It's clear in this case that you need one.
Even a lawyer may not be able to straighten this out, becuase years have gone by and people aren't around to back up statements that were made.
That's why I wrote a whole series here on why it is often unwise to make property investments in the Philippines. The system itself is often "broke" and for years people have transferred property with these informal agreements in order to save on fees for paperwork recording and the transfer taxes. Sooner ot later the chickens come home to roost.
The son of former property owners probably has a very strong claim. The fact that your inlaws spent money and made improvements likely gives them some sort of claim also. In my liited expereince, what usually happens is, the son making the claim will have to be bought out … be paid to sign a quitclaim for his interest.
This might prove expensive … again this is why I feel you need a lawyer and you need one now, before this situation devlops into a true family feud.