THE SEEMINGLY DRACONIAN IMPLEMENTATION OF WHAT SHOULD BE SENSIBLE POLICIES IS PROBABLY A RESULT OF THE INABILITY TO SEE ACROSS DATABASES. Policies dont have to be bad to have a negative effect. For example, I know of a Senior Citizen who managed to save up 4 million pesos for retirement. The 4 Million was placed in a SDA which in turn gave her around X-amount in returns over several periods a year. Then the BIR creates a new rule that taxes certain placements 20%. Now this makes sense if the govt is trying to drive out the excess cash and force people to either spend it or invest it. Thats a policy decision. But necessarily, some foresight has to be used so that this well meaning policy action does not negatively impact a marginal and sensitive segment like retirees. So now whatever the senior citizen has (and probably needs) is reduced by that same 20% while the Richie-Richs can move their money around to other safer investments. The ideal situation would be if the BIR could create an exclusion list to include Senior Citizens with no income (Edit: and even set a cap at the maximum placement allowable to avoid gaming by wealthy Seniors). The Senior Citizen would then bring a certification to the bank which the bank would then tag back to the BIR so that their collections could be rationalized (less this segmented group). If one could see across databases this would be a simple matter of implementations and monitoring. That time of databse visibility is coming is for sure. But short of that, without the rational application of similar policies the govt will always have a difficult time justifying good policies that accidentally negatively impact those who need the most support. In this case, its a good thing this senior citizen has the support of his or her family, or it might be that they would be forced into using govt resources which in turn would pose additional burden to an already burdened welfare system. Net-Net? Lose-Lose.
Posted on: Mon, 19 May 2014 08:05:57 +0000