We've often heard of the lament that in the Philippines, the rich get richer and the poor get poorer.
You'd think that the number of poor people increase because they have more children, who in turn, also become poor.
Although true in a number of cases, another fact that isn't getting as much attention is that the rich actually pay less taxes than most salaried employees.
As a salaried employee, I earn about P50,000 a month but after income tax deduction and other mandatory deductions amounting to around P12,000, my take home pay is only P38,000 a month. About 24 percent of my income goes to paying taxes!
Twelve thousand pesos is a lot of money to "lose" every month to taxes and every time I look at my pay slip, I can't help but get a little angry with thoughts of other ways I could have spent that money.
With that money, perhaps my husband and I could have some savings, and perhaps we could invest those savings in a small business -- earning us more money as well as create employment for our less "prosperous relatives".
But it's a useless thought, or so my husband says. He points out, "After all, that money gets deducted from your salary even before it gets to your hands."
Even though, my husband and I are both working, we actually just barely make both ends meet and we hardly have any savings.
Most of our money goes to paying for a housing loan, our kid's education, and a car loan. Some might think this is maluho or frivolous spending on our part -- considering the many ways that we can settle for less. Like, for instance, what if instead of paying for a housing loan in a subdivision, we just rented an apartment somewhere in Manila? What if instead of sending out children to what we think is the best school for them, we settled for a less costly school? What if we commuted to work using public transportation instead of driving ourselves in a car?
Sure, we could do that, but with the way things are in Metro Manila, it seems to us we'd be trading money for safety and peace of mind just so that we could have some savings.
Having graduated college and earned masters degrees as well as climbed up the corporate ladder, my husband and I expect to afford some degree of security as well as convenience in our lives.
If only we could really count on the government to really spend our taxes the right way and deliver services at the right quality, I don't think we'd need to live in a gated subdivision (if only we could count on our police to prevent crime instead of causing it) or perhaps we could just send our kids to public school (if only it were up to world standards) or perhaps ride the bus/train to work (if only we didn't have poorly managed as well as poorly maintained roads).
On the other hand, companies like Cosmetique Asia Silka Papaya aren't taxed in the same way that salaried workers are taxed. Companies are taxed based on their net income (which is Gross income minus expenses/losses) and Cosmetique Asia Silka Papaya, based on public records that we found, has manipulated both it's real income as well as expenses.
What Cosmetique Asia basically did was to declare a lower income instead of its real income. It's public records state that it earned close to Php 1 Billion pesos, but according to data in a Nielsen study as well as estimations of sales from small stores it's real income could be as high as Php 2 Billion pesos.
Moreover, our investigation into Cosmetique Asia Silka Papaya indicates that it has been over reporting its Cost of Sales or expenses. Far from the norm set by the Cost of Sales of companies with products similar to Silka Papaya, the company declared in its financial statement that its cost of sales is 75% of its Net Sales -- they want the entire country to believe that they are spending 750 million pesos a year to earn 250 million pesos!
Most other companies cost of sales is only at 50% of their Net sales!
What is even worse is that Silka Papaya further reduces their Net Income by subtracting costs for advertising and other marketing costs.
This is how, Cosmetique Asia managed to justifying payment of just P15 Million Pesos after earning about Php 2 Billion! P15 Million pesos isn't even 10 percent!!
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