Sunday, September 8, 2013
A week after Napoles surrendered, BIR chief Kim Henares was back - blazing her guns at what she calls the professional tax evaders of the Philippines whom she fondly identifies as mostly coming from the sector of physicians, dentists, and lawyers.
It's such a shame to wash our dirty linen in public, but some people have to become popular at a job that is highly unpopular - tax collection. Some of my friends and colleagues abroad who have been practicing medicine since they graduated from medical school and decided to hie off to a country with lesser corruption were asking me - do we really not remit the taxes due to the government?
Good question! No answer?
For the sake of argument, let's stick to the basic rules and principles. As citizens of the Republic of the Philippines, we need to pay our taxes. We are considered by the government as a value added service. Never mind the fact that we get patients that we do not charge (like our colleagues and their families, the poor people whom we get to see but don't have the money to pay, compadres and comadres and some of the celebrity friends we cater to) - the point of it all is that services rendered and paid for should have an accompanying receipt. The receipt should incorporate the 12% VAT already.
With over 100,000 registered physicians, over 1,000,000 nurses, over 100,000 lawyers and over 100,000 dentists in the country, Kim asks a simple question - why is the collection from this bunch of professionals so paltry? Her argument, particularly for physicians, lawyers and dentists is that the majority of us in this profession can afford luxury houses, several cars, send our children to expensive schools, post pictures on Facebook on so many travels abroad - and yet many of us remit taxes less than P100,000.00 a year.
What does P100,000 a year in taxes paid mean? It means that in your profession you more or less should make around P65,000 a month or P2,166.66 a day presuming that you hold clinic every day. If you charge an average of P500.00 per consultation on an out-patient basis, that means you see around 4-5 paying patients a day. This is probably a very low end computation because this consultation fee does not include specialties that need procedures (like ophthalmologists, ENT, cardiologists, etc.).
I get the point. We're not all good people. Some of us don't walk the talk. But neither is the government. With all the money that is being siphoned off to Napoles and PDAF and government officials who literally, brazenly steal under our very noses, it wasn't really a good time to call tit for tat. But Kim was just doing her job. Obviously, you cannot please everyone. The doctors ask back - how about the patients that run away and don't pay us? Where do we charge this to? Or the patients that pay you with chicken or eggs, or JCo or coffee or cologne? How do we deal with that? And the answer of Kim is that if they don't pay, don't issue a receipt. The majority of our patients, however, contribute to the food on our tables, roof over our heads, schooling of our children, gasoline of our cars, travels we have abroad (not to include the drug companies share), and according to Kim, all taxes to these professional fees should be duly remitted to the government (to steal?).
But like other businesses in the country, what is paid for is duly taxed and a receipt is duly provided. The bureau describes the scenario as - when you go to a restaurant, you don't tell them that "okay don't issue the receipt and you can remove the 12% VAT on our food". And if the owner of the restaurant is your friend and he gives you the meal or dessert on the house, he doesn't include that meal on your tab. And we can do the same.
Which now goes to the stupid idea of putting a menu for services we render (akin to a restaurant). There was more hoopla when the doctors were fighting back (like me) at the idea of a menu for patient services.
WITH DIAGNOSIS OF PNEUMONIA add P1000.00
WITH DIAGNOSIS OF ACUTE GASTROENTERITIS add P1000.00
Confinement in standard room P2500.00 per day
Confinement in suite room P5000.00 per day
Confinement in ICU P10,000 per day
Cesarean section without anesthesia P5000.00 (this is a sick joke)
Cesarean section with anesthesia P100,000.00
These were thoughts that were playing in my mind...and I was aghast because we don't actually charge patients on a standard fee for in-patients (well I don't for that matter). We charge patients according to the capacity they pay and gazillion patients end up bartering with you for your professional fees at the end of the stay. There's an ethical dilemma in advertising the professional fees - it's not fair to barter with healthcare levels because patients don't understand why there are disparate charges between doctors - the level of expertise, practice and achievement - comes with a price.
We have patients that are disappointed with how some doctors provide services. As one FB person would say, it is just correct that the BIR run after the doctors because we charge P500 "para sa laway na puhunan". A clear misunderstanding, but clearly also a disappointed patient who may have his own views on why in God's name they need to pay this much for a 60 seconds consult.
Health Insurances are different and the charges are fixed rates depending on the room and the disease or what was performed on them during their hospital stay. A good many of doctors are not affiliated with health insurances and quite a number of us hold clinic only sparingly because some of us wear multiple hats and have a more fixed paying job. Which means that the clinic is there to accommodate some of our private patients but 60-90% of the time some of us are doing some other corporate activity or have their own small businesses while the remaining 10-30% see patients as a hobby and not a full time profession.
The health profession in the Philippines is significantly different from the US, Canada, Japan or even any other country. Here, the doctor has to make ends meet by multi-tasking and taking on different hospitals at different hours of the day at different days of the week. We have no 13th month pay. We pay for our own transportation and gasoline and car maintenance. We have no fringe benefits. If we don't make it as a doctor, many of us take a nursing course in the hopes of finding greener pastures in some other far away country because what we actually make is not enough to make ends meet. It's the way the healthcare is built in this country. Of course, Kim Henares is getting accolades from the US and other countries about her being one tough cookie trying to address the tax deficits in the country. But a tough cookie not in tangent with reality speaks poorly of the knowledge of the bureau on the practice of law, medicine or dentistry in this country.
What counts actually is to really run after the largesse that use taxpayers money in order to enrich themselves. And that's where the difficulty lies because most (if not all) of them are from the government. It is obvious that they have the manpower, the will and the innovativeness to hide what they steal and steal what is supposedly for the people. I guess at the end of the day, we just draw the line and say - let's follow the leader.
A perfect example are how some young people drive around in spankingly expensive Mercedes Benz owned by their parents who probably do not have legitimate resources for funding these. I have neighbors (sad to say) who really have no cash or are not even financially well off but they have a dozen cars or so in their garages. Why can't the BIR start from that? Look at all these fancy cars, find their owners and dig backwards and see if they even paid their taxes due compared to the properties they own or the businesses they run or even the cars they have? It's a simple way of running after tax evaders.
The meat of the problem lies not in government being inefficient but rather in who enriches himself while he/she is in power - are the ones running after the people who apparently do not pay taxes correctly. You can only expect the professionals to abide by what the government says if you dialogue with them and look for solutions by understanding what the real concerns are. Until government is able to take this step, there will always be an avenue for misunderstanding. With one side opposing the other side with various reasons. You can only expect people to pay taxes correctly if the taxpayers palpably see where their taxes are going to.
Several months after Kim has said that she would run after online businesses, where has that gone? Nowhere!
Several months after the government has run after former AFP Comptroller Garcia, where is the loot his family has stolen? What has happened to the Euro Generals in the term of GMA?
When you're running after the small fry, they only get angry because government has not resolved the bigger fries.
Start with them and then you can expect all professionals to follow your rules. In the meantime, it will be a long, tedious, painful debate on what Kim expects the professionals like doctors, dentists and lawyers to follow.
You can only make changes if you make the changes within the bureaucracy first. You cannot expect people to trust you just because you say so. Trust is a long relationship and the most pivotal one. It will wear itself thin because rules and regulations are made only for a select few.
Professionalize the Bureau of Internal Revenue. Then change will come. You cannot start with the taxpayers. Like every family, change begins from home.
Posted by Kid at heart at 8:09 PM