Do you pay correct taxes? (government eavesdroppers not allowed here)

As a young reporter, I used to write all the time about the budget deficit and how the government was (it still is) up to its neck in debt and almost bankrupt. Truth is, the government has lotsa money. It spends trillions every year and it has the power to print the moolah. Question is, how does it spend the money? What are its priorities? Look at the list of economic bills prioritized by the government this year:

• amending the EPIRA Law to allow more access to competition,
• ratifying JPEPA
• creating the Civil Aviation Authority
• approving the proposed 2008 budget
• implementing the Simplified Net Income Taxation
• Rationalization of Fiscal Incentives
• Credit Information Systems
• establishing the Personal Equity and Retirement Account
• formulating a national tourism policy
• amending the Customs Brokers Law
• formulating a national strategy to conserve resources and helping arrest climate change
• identifying sources of renewable energy
• amending the Land Use Act
• passing Anti-Trust bill
• extending the Agricultural Competitiveness Enhancement Fund
• and promoting the Information Technology entrepreneurial ventures.

For financial planning watchers, the simplified net income taxation bill, credit information systems, and PERA bill (click here for the full text) are significant legislations to follow. There are many good men and women at the Department of Finance. Brilliant, too. But counting on a simplified tax rate to boost tax payment especially from professionals? That’s rather naïve, in my view. Professionals who under-declare taxes because its convenient to just let someone “fix” it will need much more than that to come clean. It’s a good concept, but I’m not sure it would fly. The National Statistics Office also reported that inflation slowly inched upwards in July to 2.6% from 2.3% in June. If you put your money in a time deposit that earns say 6% per annum, you’re actual earnings June 2007 over June 2006 was only 3.4% because inflation ate up almost half. More IPOs coming up: ABS-CBN units SkyCable, Global seen going public. Honesto General talks about the cement cartel in his Questions of Policies column. If you’re doing your home renovation or building your house, this article will kill your appetite to buy more cement for that concrete wall in the backyard. Esewhere, Neal Cruz asks some very sharp questions about how Philippine stockholders may be cheated in a P12-B deal concerning the Philippine Racing Club Inc. Be educated about how stock investing can turn ugly and read this article. I used to teach at the University of the Philippines so this report from the US State Department that the declining English language proficiency in the Philippines and corruption are turning off investors is like a punch in the stomach. I still remember my dismay at finding out that most of my students could not speak straight English (without the collegiala accent, please). I would have been pleased even if they couldn’t, if they could speak straight Filipino. No, they couldn’t :-(. Government has placed PIPC country general manager Cristina Gonzales-Tuason on the immigration watchlist so she cannot bolt, ADB says Asia’s rich is getting richer and the poor are getting poorer, the peso closed high at P45.18 against the dollar as the stock market breathed a little easier yesterday, and we have two long weekends in August (yehey!). That’s because August 20 (commemoration of Ninoy Aquino’s assassination) and August 27 (Heroes Day) are both holidays. In the blog world: Moolah Matters says she still prefers paying in cash instead of credit card and how the one-price rule is disadvantageous to consumers. My previous blog post on “The truth behind 0% interest promos” will tell you exactly what goes on behind the scenes when buying expensive items. Jon Mariano thinks that a P12 wage increase is a pitiful pittance and Philippines Without Borders writes a very informative and convincing piece on why the wage increase will make the country even more uncompetitive compared with other Asian countries and the hidden root of the problem. Oh, by the way, I asked HSBC to clarify its 0% interest on balance transfers that I wrote about in this previous post. Peeling off the marketing linggo, what HSBC is offering is 0% on the balance you transfer to this new card, no add-on rates, no finance charges, no handling fees as long as you pay at least 5% of your balance. Now, after you transfer your balance, I’m pretty sure you will find a good reason to swipe your new shiny credit card to buy that new couch you’ve been eyeing or pay for a feel-good spa that you deserve naman after working so hard ;-). If you become a roller, the bank says: “If you have other transactions and pay more than 5%, the excess payment will be applied first on the other transactions (i.e. transactions that are interest-chargeable) before the interest-free balance. This is advantageous to the client since the interest-chargeable portion is paid off first and interest-free term will be maximized.” Now, take note that: “Any new debt incurred outside of the zero interest portion, will be subject to the usual finance charges.” So, if you’re looking to retire credit card debt of at most P12,000, this is a good deal so long as you have the discipline to pay the balance within one year and you don’t rack up new debt with your new shiny credit card. You’ll just have to pay off new purchases in full to take advantage of this offer. This promo, by the way, ends September 30. (This is not paid advertisement.)