Thursday, November 4, 2010

Of Millionaires, Billionaires and Tax Evaders - Part I

The title does not mean that I lumped them all together, but if you think you're being alluded to - too bad!

My blog series is a composite of two opinion makers - Tony Lopez and Boo Chanco.

Hence, they are not my writing. I am sharing the facts they pointed out and I'll let the reader judge. I have also taken the liberty to place my own comments on these. What is written in BOLD and ITALICIZED are from the original writer.

I am dividing it into two parts so that you don't get bored with reading these back-to-back articles that I found interesting and revealing.

The Richest Filipinos and the Biggest Taxpayers Are Not the Same
by Tony Lopez

Forbes Magazine's list of richest Filipinos and their respective net worths are:

1. Henry Sy, Sr. - $5B
2. Lucio Tan - $2B
3. John Gokongwei - $1.5B
4. Jaime Zobel de Ayala - $1.2B
5. Andrew Tan - $1.2B
6. Tony Tan Caktiong - $980M
7. Enrique Razon - $975M
8. Beatrice Campos - $840M
9. George SK Ty - $805M
10. Eduardo Cojuangco - $760M

The list goes on to enumerating 40 richest Pinoys (or should I say Chinoys who make up 50% of the richest) with Philip Ang at number 40 at $50M net worth. That's more zeroes than I could ever see in my lifetime.

For the complete list of the Top 500 Taxpayers of 2008, please get your copy of the latest issue of Biz News Asia weekely news magazine at the nearest bookstore or hotel newsstand.

Compare the Top 40 Richest Filipinos based on the Forbes list with the Top 40 Taxpayers of 2008 based on the BIR list...It is a very interesting and revealing honor roll. It is veritably the roster of current heroes of the Philippines. Two conclusions:

1. People who you think are among the country's richest are not in the Top 500 Taxpayers list. So, too, are prominent and fabulously rich people who often rant about the need for good governance and have good corporate social responsibility.

2. The most rewarding jobs are not in business or top management. They are in entertainment, broadcasting and movies.

In serious business, mining is very remunerative. The highest-paid tycoons are miners - Philex CEO Walter Brown with P26.83M (#9) and Rio Tuba Nickel CEO, Atty. Manny Zamora Jr, with P19.96M (#12).

Behind them are owners and CEOs of conglomerates: SMC chair and CEO Danding Cojuangco Jr with P18.98M tax (#13), PLDT chair and Meralco CEO Manuel V. Pangilinan with P18.55M tax (#14), Unionbank chair and CEO Justo Aboitiz Ortiz with P15.2M (#19), and SMC President and Petron CEO Ramon S. Ang with P14.85M tax (#20). Trailing them are ePLDT and TV5 CEO Ray Espinosa, P12.27M tax (#22) and GMA Network and DZBB Broadcaster Mike Enriquez P11.94M tax (#23).

This makes Enriquez the country's highest paid mediaman. He finds it funny, if not ridiculous, that he paid more taxes than the owners of the two largest TV stations. "This means I pay the correct taxes," he notes. His channel 7 colleagues, Mel Tiangco is #45 with P8.9M in income taxes paid. That makes her the highest paid female broadcaster.

Television is a big moneymaker.

Four of the country's 10 biggest taxpayers work in TV entertainment. Willie Revillame leads the pack at #2 with P58.6M tax followed by Piolo Pascual at #3 with P55.8M tax, Kris Aquino at #8 with P25.44M tax, and Michael V at #10 with P22.26M tax.

Boxing's Manny Pacquiao is the Philippines' number 1 taxpayer with P125M in tax payments. In June 2009, Forbes magazine estimated the Filipino boxing great's income at $40M or P1778B.

He paid P7 of tax for every P100 of income, a tax rate of 7%. Revillame had a higher tax rate, P58.6M out of P365M estimated gross for a 16% tax rate.

To be sure, 2008 was a crisis year for Philippine business. It was the year the world went into the deepest recession in 80 years.

Undeniably, this information has struck a nerve among the average tax payers - like you and I.

The opinion here is these billionaire moguls can hide behind all that corporate blah blah blah and even wash down the dough they're making under some other charge (including their pet's haircut) only to run away from having to pay more in taxes or afford high profile accountants to hid all that moolah they've accumulated so far. So the richest are actually not the richest considering that they really don't TOTALLY own the companies they claim to own - lock, stock, and barrel! Considering individual gross and net income as well as taxes paid, I agree with Tony that the entertainment and media industry is the most enticing. It is not wonder that every Juan de la Cruz is willing to shed their clothes and their shame in order to hit stardom. I mean, let's face it, even the ugly ones or those that don't even have talent at all have gotten a break!

If PNoy actually wants to make the BIR work their butts off and is serious in his campaign on tax evaders, he does not need to go far and wide to look for them. Just pick up the Forbes List and see if there's a match in the richest Pinoys and the biggest taxpayers.

In my next blog, I will take you to a simple arithmetic look at tax evaders and tax evasion in part II of this series.

In the meantime, click on the video below and enjoy the music. I so love the music and lyrics - it's dedicated to all the billionaires and wannabe billionaires...

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