Pastoral Statement on
Taxation and the Expanded Value-Added Tax Law (R.A. 7716)
The total human development of our people is at the heart of the Church’s mission, whose founder, Jesus Christ, came that we might have life and have it in abundance (Jn. 10:10). Hence we cannot be unconcerned with the present agitation aroused by R.A. 7716 or the expanded VAT Law. We, your bishops, are not economists. Still less are we tax experts. But we are shepherds committed to promoting the total well-being of our people, and as shepherds we must have a concern for what leads — or does not lead — to the total well-being of our people, especially the poor. It is in the light of this concern that we would like to speak, not only on R.A. 7716 as such but on a deeper issue: the reform of our whole system of taxation.
We start with two basic principles:
• The government has a right to impose and collect taxes provided these taxes are just; correspondingly the citizen has a duty to pay taxes faithfully, honestly (Rom. 13:6-7). The monies collected must be used by government for the common good, providing such services as are needed for the public welfare, not for the selfish and capricious consumption of those in power.
Applying these principles to the Philippines today, we note these only too obvious facts of our situation:
• Our tax structure and the system of tax collection are in some need of reform. Our taxes are regressive, that is, they are slanted against the poor, the heavier burden being put on their shoulders, not on those of the better-off sectors of our population. The pervasiveness of graft and corruption in government spawns two interconnected evils: the improper collection of taxes due; the non-provision of badly needed public services.
Keeping the above principles and facts in mind, we ask ourselves what can be done to institute necessary reforms. The following questions come to mind:
• Is the expanded VAT Law just one more step on the direction of strengthening our tax structure’s bias against the poor; or conversely, does it remedy that bias? Does it effectively safeguard against corrupt and dishonest practices in the paying (or avoidance of paying) of taxes, improve in truth their collection?
As Christian citizens we must address these questions in depth, come up with some answers that will fully satisfy the principles we started out with and correct the present infirmities of our tax system.
We urge a thorough review of R.A. 7716 when Congress convenes precisely with these questions in mind, and we ask that our people be consulted and informed about its provisions so that any inequitable aspects may eliminated, and the consent of the people obtained. For only when the people are allowed to participate in the decisions that affect them can we speak of genuine people empowerment.
For the Catholic Bishops’ Conference of the Philippines:
(Sgd.)+CARMELO D.F. MORELOS, D.D.
Bishop of Butuan
July 10, 1994