I think our progressive tax structure is pretty fair. The only thing I resent about is the taxpaying distribution. I think they (the government) put too much burden on compensation income earners, salaried workers in short.

I think our progressive tax structure is pretty fair. The only thing I resent about is the taxpaying distribution. I think they (the government) put too much burden on compensation income earners, salaried workers in short. It was only when I glanced upon an article at the Philippine Daily Inquirer when I realized this painful reality. I'm a business owner, what do I know? Anyway, the burden that salaried workers are carrying is just too much. And there is every sign that the weight they bear has been increasing.

Not very long ago-1995, to be exact -- professionals and persons engaged in trade and business in this country contributed 24 percent of the total income taxes paid by individuals, with fixed-income or salaried workers contributing 66 percent. By last year, the contribution of the salaried workers to total income tax collections had jumped to 83 percent, and that of the professionals had decreased to 12 percent. Looked at another way, tax contributions from professionals, etc. in 1995 amounted to 0.49 percent of the country's output while that from salaried workers was 1.34 percent of GDP. By 2002, these percentages were 0.26 percent and 1.81 percent, respectively.

Of course, one can argue that salaried workers far outnumber businesses or professionals, so their contributions should be greater. However, the data also show that while salaried workers outnumber BPs by a ratio of about four to one (based on number of income tax returns filed in 2001), the income taxes they paid were nearly eight times more. That is lopsided by any standard.

It is not hard to think of reasons why the relative tax burden of the fixed-income taxpayer is increasing: it is much easier for BPs than for salaried workers to avoid (or evade) taxes; income tax rates were reduced by the 1997 Comprehensive Tax Reform Program Law, but ceilings on deductions that the law envisioned have not yet been fully imposed. However, the more relevant question that needs to be addressed is, why it is so lopsided in the first place?

The bottom line is that while the weighted average effective tax rate for salaried workers in 1996 was 26.7 percent (and hasn't changed much since then, I am given to understand), mixed income earners and BPs had effective tax rates of 5.7 percent and 1.3 percent, respectively.

You might be thinking that business owners like me should be alright with this. But I'm not. I think this is unfair to salaried workers and must be fixed immediately.