The #Philippines TRAINwreck #TaxationIsTheft

Juice from Php 8 to 15

1 litre of soda from Php 56 to PhP 72

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Just think,  every time you drink sugary beverage, you are drinking cement road, courtesy of your moronic voter friends 

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Look on the bright side, it’s one reason to just drink water, stay healthy while depriving the idiotic government and its cronies of tax revenue 😄😄😄

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The Filipinos had the opportunity to remove the 60/40 and liberalize the economy, thereby expanding the tax revenue base.

But, no, they bought the nationalism bullshit 😄😄 

And if that’s not enough,  they now want to take the federalism crap cake  as well.

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Small retailers generate income from soda. That’s gonna kill their revenue stream – ergo, the state loses revenue!

How exactly are you helping low wage earners when their take home pay just goes to higher priced commodities. Do the math!

An FB friend, I will refer to as J commented

BS. That is rubbish put put by the sugar industry. I am a major shareholder in a coop (fancy sari sari), sales per a month are 50K. Soda accounts for less then 20% of sales. The consumer will just switch to buying something different with the same amount of money. 

Soda etc is not a “commodity”. Things like eggs etc are commodities.

That’s not rubbish, have you been to a local sari sari store?

Yup, the consumer will switch to buying something different,  thereby negating the projected tax revenue from soda 😄😄😄

Eggs are transported via vehicles that run on gas.

The gas tax also increased. Guess what happens to the price of basic commodities transported by vehicles that run on gas, price reduction? 😄😄😄

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On soda accounts for less than 20% of sales. 

So let’s peg soda at 18% of sales. If soda drinkers reduced their consumption by half or 50% of 18%, that’s a 9% drop in sales. 

Let’s say employees will not be given a wage increase due to the increase in their take home pay. However as the rate increases kick in, leading to inflation of ALL basic commodities, electricity, transportation expenses, and VAT, they have less savings and less discretionary income – and will soon demand wage increases. 

So now, you will have a situation where  the coop * faces a drop of 9% in sales

* employees ask for a wage raise, 

* plus an increase in coops operating expense  (electricity, increase in cost of goods sold).

All this will  impact on shareholders dividends. Good luck!

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FB friend J, continues:

So on the eggs, what percentage of the cost of the egg is transportation costs? How does the fuel tax in the Philippines compare to other countries like USA, Canada, Europe etc?


 In the US, tax on fuel off the pump is based on the sales tax and can range from 7% to 9% depending on the state. 

In the Philippines, the regular gas price before tax is P33, it becomes P42 after tax. The 9 peso differential is 9/33 or a whooping 27% or easily 3 times or 300% higher than US tax on fuel.

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Pricing on the eggs will depend on:

* how many eggs were loaded on a truck

* the distance the eggs were transported from farm to store

Note further that there’s also a VAT tax on sales of eggs.

Also, eggs aren’t the only basic commodities transported on vehicles running on fuel.

Then there is also the wage pressure from drivers who drive the truck,so they too can afford the price of basic commodities.

Then there’s also the cost of inputs for the hens that lay the eggs, also transported on vehicles running on fuel. Then there is the additional tax on electricity – used in poultries.

It’s gonna hit hard. Of course, people will still buy, but at reduced quantities – negating the projected tax revenue. 

It will all add up.

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FB friend J, continues:

Difficult question to answer, when the price of oil spiked a few years back, this report was  made. It shows that the price of production, even if the price of fuel doubled would only increase 5%. Take into account this is for American farms, they are more mechanized then filipino farms.

 American farms are highly subsidized. The US government even pays people not to plant in order to keep prices high. It’s messed up.

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When the price of oil dropped, the US didn’t increase the sales tax, consumers kept more of their money instead, I was there when it happened.

In contrast,  the Philippines government,  raised taxes on oil, after the prices of oil dropped worldwide.

And for US businesses, fuel expenses are also tax deductible. I am not aware if the Philippines has similar provisions.

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Another FB friend I’ll refer to as D chimed in:

It is irritating to compare like ‘other countries tax etc etc’, ofcourse many things are taxed, but that is too general of a statement, we are lost on which economy of country are in comparison to the Philippines. Lol.

 

Just because other countries have lots of taxes, doesn’t mean you have to follow suit. In fact firms that provide jobs and pay taxes simply decide to go where the cost of business is lower.

What’s really happening is that the Philippnes tax base has contracted aka reduced, because lots of firms moved to other countries with lower cost of electricity, gas, and shipping. For example,  Thailand and Vietnam.

To cover the loss, the government increased the tax rate on its reduced tax base instead of opening the economy to expand the tax base.

Their projected revenue is vaporware. 

Blowback is coming. Get the popcorn. 😄😄😄

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FB friend , D added

And the train is not only about sugar, it is also about addtl tax on oil, ofcourse fission effects come to play.

 It’s gonna hit the entire supply chain.

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Another FB friend, A, pointed out:

 They did it first with cigarettes, and now, with sugary products…

 It’s gonna boomerang as more people start paying attention to taxes instead of personality cults.

Hope it boomerangs very soon…This is too much…

Perhaps,  this will be the proverbial needle that broke the camels’ back.

The 1776 American Revolution took place due to the British tax on tea. So who knows,  the #Philippines government just shot itself in the foot.

I wouldn’t be surprised if:

* there is an increase in smuggling of cigarettes 

* NPA attacks on BIR offices and personnel (pogi points for NPA)

* slowdown in economic activity as people choose to save their money instead of spending

* government does not meet revenue goal due to lack of understanding of consumer behavior and economics – elasticity of demand

* a grassroots movement to topple a parasitic regime

* NPA attacks on congressmen who voted for the bill

* support for a coup by soldiers who are also hit hard by these tax increases and the impact on basic commodities

But maybe, this Train is a bait so that when people react, the regime can expand martial law to cover the entire country.

Then the Filipinos may have to do some more soul searching, do they want a Marcos and Cory redux or regrow their balls and chutzpah to get rid of tyranny once and for all time.

Get the movie popcorn,  it’s gonna be interesting times.

Meanwhile,  for the cluey, here’s something to think about

 

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One comment

  1. […] called out this coming train wreck in January 2018 – and here we […]

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