mercadoforpresident

Third On-Line Presidential Forum

Corruption in Government
and the Income Tax Collection

The China ZTE's $329-Million National Broadband Network(NBN) aborted deal with the Arroyo administration has threatened the President's survival . The aborted deal is one of the various Official Development Assistance(ODA) given to the government in the form of loans. Is there a relation between corruption in government and the collection of the income tax?

The raging issue of corruption in government and the imposition of the income tax is discussed in this Third On-Line Presidential Forum.

We notice the growing interest of our readers in the campaign for the abolition of the Income Tax through their e-mails.

We encourage our E-mail Friends to send this Third On-Line Presidential Forum to your e-mail list for a national and international discussion of this topic. Thank you, and God bless you.



QUESTION : You gave a good exposition during the Second On-Line Presidential Forum on how family income,business growth, and government revenues will increase as a result of the abolition of the income tax. Obviously, this program of yours when God will make you as the President of the Philippines is super excellent!!! Finally, our people will have hope for a brighter future. Praise God! But another major cause of our people's suffering is corruption in government. Do you think that the imposition of the Income Tax assists corruption?

Bishop of the Right and the poor(BRP) : Yes. I think these two issues are related.

QUESTION : In what way?

BRP : Well, the imposition of the income tax to Filipino taxpayers since 1913
has created a "financial comfort zone" for the government. Income Tax is a sure income. Now, having a sure income has emboldened our political and economic planners to keep on borrowing from foreign creditors. For instance, let's take the issue of Official Development Assistance(ODA). Foreign countries such as China, Japan, South Korea, Taiwan, as well as the World Bank and the Asian Development Bank among others, have given us so-called financial assistance through what we mistakenly term as Official Development Assistance or ODA. These ODAs are in fact "sovereign loans", which means that they are backed up by the government funds. These are the loans which are often said as disadvantageous to the government and the Filipino people. Example of these loans are the controversial and aborted the US$ 329-Million National Broadband Network(NBN) with China ZTE. Joey de Venecia and Jun Lozada said that there was a US$130-Million grease money connected to the project, or almost 40 % of the project's cost. US$130-million at the current exchange rate is more than five billion and two hundred million pesos (P5,200,000,000) "commission" or "grease money". It's good that President Arroyo canceled the project.Let's pray for her. Life has become more difficult for her lately. We have been praying for her. There are other ODA projects from "donor" nations which have been approved by NEDA, such as the Subic-Clark-Tarlac Expressway Project which is backed up by the US$355-Million Loan from the Japan Bank for International Cooperation(JBIC). The Export-Import Bank of China is lending the Philippine government US$400-Million for the North Luzon Railway project, which on-going. China also wants to lend the Philippine government US$542-Million for our Cyber Education project. A common characteristics of these loans are: 1) excessive bids and cost overruns; 2) procurement of materials from the "donor" countries; 3) the projects are undertaken mostly by the companies of "donor" nations. This issue will take a long time to discuss, but suffice to say, the loans have naturally produced a balloon of foreign debt. This foreign debt, not to mention the local debt, is backed up by the government funds which are derived mostly from taxation, which includes the income tax. Our government is emboldened to keep on borrowing because they can always tax the people, and it has been doing so.

QUESTION : Does this attitude of the government abet corruption?

BRP : Sure! Whoever is arranging the project, even if the cost is beyond the so-called ABC or approved budget contract, can always justify it by saying that the Philippine government can pay the loan. They can always say, "i-tax natin ang tao, bayad yan"! This is a dysfunctional attitude which does not help our people and our country at all.

QUESTION : But don't we need these projects for national development?

BRP : Yes. But we have to look more closely at these loans. Then, we should ask ourselves if we really need these foreign loans to undertake these projects. I believe that there are other ways of financing badly needed projects, and these ways have to be tapped.

QUESTION : What will you do to these loans if you are the President?

BRP : I will politely tell China, Japan, and other ODA donors that I will have to study their offers. In their present form, I will most likely reject them.

QUESTION : Wouldn't this prevent the undertaking of these projects?

BRP : No. Not necessarily. We will have to tap more liberal sources of funding for much-needed projects. And we must be creative and resourceful, putting our faith in God and in our people. That's why I have been batting for the abolition of the income tax, so that family incomes will grow, business will expand, and government revenues will increase. When we reach this point, we can tap local funding and manpower to put up these projects. In fact, even at this point in time, we can already do some of these with the able assistance of the private sector. Some, not all. The rest, we can do step by step, according to our ability as a nation to earn income.

QUESTION : Are you a conservative spender?

BRP : There is a cardinal rule which every wise person or government should adhere to : "Do not spend more than what you can earn." Look at the American people and their government. They are spending more than what they are earning. And look what's happening to America now. Let's pray for the American people. I love Americans. It was an American who introduced me to Christ. Another American discipled me in my Christian life. Let's pray that the good Lord will deliver the Americans from continued recession or a possible depression like the Great Depression in the 1930s. If this will happen, and let's pray it will not, the world maybe nearer to Armageddon. Read Matthew 24 and you will know what I mean.

QUESTION : Will the abolition of the Income Tax discourage corruption in government?

BRP : Yes.

QUESTION : In what way?

BRP : Look at what I will do after I get elected as President, as the good Lord wills. My first act as President is to order the BIR to stop collecting the Income Tax, since this is the will of the people. That's why they elected me as President. My second act is to declare war against corruption. I will do this in a very unorthodox and strategic way. Read The Art of War and you can glean strategies which you can apply in any form of warfare, including the war against corruption. As my first operational step in the war against corruption, I will examine the National Budget Allocations(NBA). From this vantage point, I know how to attack corruption, which is the enemy. If the newly-appointed Secretary will come to me and ask me ,"Sir, how can we perform well when you have slashed our budget?", I will simply reply, "Look, in the recent years, your department has lost 40 per cent of your budget to corruption, and still your department managed to operate." I will tell him or her to manage his or her department well, even if its budget is slashed. " If your department does better and more upright, let's see your budget for the next fiscal year." I will remind Mr or Madam Secretary that we have just given up the Income Tax as an investment to our people, so we don't have that much as of the moment. But more revenues will eventually come , so we can examine his or her budget for the next fiscal year if his or her department does what is honest and right. There are various weapons for fighting corruption. The first weapon I will use as President is wisdom in budget allocations. I will have to deliver a strong message to my secretaries : "Shape up, or I will slash your budget! And when your budget goes down , you go down, too!"