Employees and Businessman: Just a part of a big beehive

Filipinos are just any other citizens in the world, we work in order for us to have a better life or just a
life-plain and simple.
But other people tend to ask why are we still poor? and others would say that rich people are getting
richer by the day and the poor are getting poorer. Maybe its because rich people are not paying
taxes.
These are just some sentiment of our fellow worker, employee, or even the self-employed. And I
thought probably they are right, probably they have a point somewhere in these sentiments thats why
they are still as poor as they started. Economy is not changing even though they pay taxes just like
everybody else.
I know some friends who have the same thoughts in their mind, same experience and same dilemma.
They keep on complaining that they pay taxes, they should have better salaries at this point, or that at
least the groceries be much cheaper by now.
I did not pay much attention on my accounting subjects like taxation and other related principles in my
college days. Thats why as much as I would like to enlighten them, it also leads me to nothing, and at
some point their sentiment just became mine. And I thought Philippines is just a huge beehive with
workers who work their lives away and drones who actually do nothing and yet get their share in the
hive.
Now, Im in law school and Im a bit familiar with this taxes (not that familiar, but a so-so familiar would
be enough to see the difference) and how it is being applied to a certain group of tax payer. I have a
friend, whom I grow up with, and since he got a job he keeps on complaining about how the
government keeps on pouncing on his earnings and how these taxes holds him to the same point
where he started. And compared to the business tycoons who he thinks that, compare to their earnings
is not really paying the same taxes as he did.
Maybe my friends contention has a point, maybe at some point he really feel that these tycoons are not
really paying that much. The Forbs magazine, one of the best magazines in town, release their issue and
one of the topics there is that The top Millionaire in the Philippines is not the top taxpayer. So this is
my friends point, small tax payer pays half of their earning and work as hard as everybody else but then
again, they are being stuck on the same level and without any progress.
Kim Henarez also stated that because of the different nature in employment of these people the taxes
being impose to them are also different, an average Joe being tag as employee is being tax in a
different way and that those tycoons are self-employed so they are also being tax differently.
So, as a non-accountant, lets dissect these issues. Forbs also stated that 95% is employed (i.e employee,
doctors, lawyer, teacher and even self-employed that include small proprietor) 5% is businessmen (i.e
shareholders, company owner, etc.), but surprisingly here in the Philippines 95% is poor and 5% is rich.
Lets have a comparison, an employee have a monthly earning of P16, 000.00. On a monthly bases BIR is
deducting their earnings thru withholding tax, that will be fix monthly so that after a year the tax that
they need to pay is zeroed out, its as if they are already paying their taxes partially, payable for 12
months, usually the withholding tax multiplied by 12 is equivalent to income tax of an employee. Now
lets see how the celebrity (included in the 5% who are rich) being taxed. Suppose a pop star earns P500,
000.00 on September because of a commercial shoot, and another P870, 000.000 on December for a
soap opera. What will happen is that she will get any amount due for taxes on these two earnings she
has during that year and pay it directly to the BIR.
So lets see, Commissioner Henarez stated that tycoons are rich and there taxes are different because
they are self-employed. But in reality, employee and self-employed are being tax in the same manner.
Therefore the contention that tycoons are being tax on a different manner has no bearing at all. The
owner of a company, even though by virtue of a great opportunity he is the owner, his status on that
company is still and employee therefore he is being tax just like everybody else. That claim which
stated that some tycoons are not the top tax payer is because of the fact that they are being tax just like
everybody else.
The reason why the tycoons comes to a possession of such wealth because they are in the right time
and the right place to establish a business. In Pres. Marcos regime, businessmen are being encourage to
create one, and when I mention right time, it is that particular period where economy is thriving (in the
Philippines) and that opportunity is what every businessmen sought to have, many markets to target
and new customers to have. It is because the opportunity of a businessman is more flexible than that
who is employed, thats why they have more income or gain than an average taxpayer not to say that
they do not pay taxes correctly but taxes are nothing compare to the opportunity that they have.
So probably thats what I would tell my friend. That the place we live in is really a huge-very huge-
beehive, wherein everybody has a right place, a duty that needs to be done and a gap to fill in. Even
drones have their own place in the hive, but if we can only see, that businessman are not actually a
drone but also a worker, a worker who can carry more load which goes directly to the economy and if
we can see they are the creator of some opportunity and direct contributor to the growth of our
country.