I am not a fan of MJ but a portion of this interview made him win my admiration and acknowledge his brilliance.
The Business Mirror's website is back to business and the article may now be accessed online. I read the hard copy this morning. That's where I got the earlier post. Let us read what the paper directly quoted from him;
"There are a lot of revenues that are not reported, and examples are everywhere. C’mon! Let me give you an example: Instead of paying sales tax, I’d tax companies based on their production. That’s what you call measured capacity, and I told the President about this. Now it’s measured. And I have the technology. I can use radio-frequency identification on the inventories [of factories]. That’s what’s being used right now in Latin America. I can talk to Manny Pangilinan tomorrow and broadband [the computation of taxes] so all the factories will be monitored. Easily, we can increase tax collection by P1.2 trillion.
Here’s another example: the 12-percent value-added tax (VAT). All I have to do is vertically integrate through a backbone all the data that can be accessed with the press of a button. You eat a pizza and you pay a 12-percent VAT. That 12 percent is entirely paid to the government, no more, no less. That’s another P1 trillion collected. With the additional collection, we can easily quadruple the salaries of policemen, nurses and everybody else!"
Let us extract the two points, namely the use of the internet technology in:
- Collecting taxes based on production and,
- Collecting the EVAT.
Amidst the negative publicity against the former Congressman, I find those two proposals very interesting. To start with, I am almost sure that most people in the tax bureau do not have any idea what he is talking about. But as a somewhat internet savvy individual, I think there is a lot of substance in his suggestion.
The way I understand imagine it; one way to implement the first measure will be to electronically tag all factory machineries, vehicles and other equipments. Every time it operates, special software will calculate the amount that it produces and store it in a databank. All raw material deliveries will also be monitored through electronic tagging at the factory gates and its origins traced through invoices. The values of the raw materials will be cross referenced through import documents and traced back to the manufacturer. This process will make undervaluation, mis-declaration and other forms of technical smuggling of goods very difficult.
The entire processes will be more than enough to fill several pages of this blog but the initial stages that I have listed here should be more than enough to affect a record breaking increase in tax collections.
In regard to the 2nd proposal, all cash registers only need to be linked to the tax bureau (through the internet) and no sale will go unreported.
This process excites me for:
It can be easily implemented and will surely be effective.
It will not cost the government much (the private sector can easily finance this)
Most importantly, it will NOT BE an additional burden to the consumers. The way things are now, businesses charge the consumers with EVAT (in every transaction), do not remit all of it to the government and manage to get away with it.
Mark Jimenez’s proposal is a very good solution.
So many things are not known about Mark Jimenez and this article shows one thing about him, his experience as an IT businessman can be very valuable to the Filipinos. His ideas are ground breaking and can be very useful. Now wonder, President Clinton listens to this guy.