ABS-CBN vs GMA 7 tax payments to BIR A legal or ethical issue PDF

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A very controversial event occur amidst the COVID-19 pandemic is the non-renewal of the ABS-CBN franchise....

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A very controversial event occur amidst the COVID-19 pandemic is the non-renewal of the ABS-CBN franchise. Let us have excerpts on the report regarding tax payments of the country’s two giant networks namely: ABS-CBN and GMA-7. In a report by msn.net last May 27, 2020, during the Congress hearing on ABS-CBN's franchise renewal, Deputy Speaker and SAGIP Party list Rep. Rodante Marcoleta compared the amount of taxes paid by the embattled network and its rival GMA-7. In 2017, GMA-7 paid P1.09 billion paid compared to ABS-CBN's P421 million. In 2018, GMA-7 coughed up P1.08 billion while ABS-CBN used its tax credits. In a report by inquirer.net last July 28, 2020, Ricardo Tan, ABS-CBN Group CFO said, ABS-CBN as a group paid in 2018 a total of P5.2 billion in various taxes, of which P465 million was income tax. Narrowing the situation down to 2018 alone, when ABS-CBN paid P465 million while GMA7 paid P1.08 billion to the Philippine government. All along the Kapamilya network is proclaiming that they are the country’s no.1 network, the country’s largest media conglomerate, and the country's world-class network, putting Kapuso network, on a bitter 2nd place, is the income tax payment of the 2 networks fair? Why or why not? What could have been the legal remedy that allows ABS-CBN to pay only less than half of GMA7 income tax payment to BIR? Is it an ethical issue on the part of ABS-CBN? Why or why not?

ANSWER 1. What is a ‘fair’ amount is subjective but according to the consultancy firm Sustainability, a responsible and ethical approach is to see tax “not as a cost to be avoided, but as a legitimate payment from wealth created to the countries and communities that contributed to the wealth creation in the first place.”

I think what ABS CBN did was not fair even though they paid all their tax liabilities. According to the Bureau of Internal Revenue, they clarified that ABS-CBN has, so far, paid all its tax liabilities and has no delinquency. But for me, tax should not be seen as a cost to be avoided, but a social responsibility to help each people in a nation. Although they used a legal method of reducing their tax, every firm should pay their fair share of tax. Meanwhile, there is no doubt that GMA paid their tax fairly. Since we all know that GMA is also a big corporation, it also pays a big amount of tax liability without using tax avoidance. Thus, many people are benefiting from it.

2. As I have read, tax avoidance is the legal remedy the ABS CBN is using. Tax avoidance is a legal method to minimize the amount of income tax owed by an individual or a business. This is generally accomplished by claiming as many deductions and credits as is allowable which ABS CBN did. 3. Even though ABS CBN used a legal method of reducing its tax liability, I think that it is unethical because avoiding tax is avoiding a social obligation. I believe that it is a social responsibility for firms to pay tax which provide the funds for public services such as healthcare, education, and infrastructure. Although they do not literally avoid paying taxes but only reducing it, I still think that if they pay their tax without reducing it, they will help more people rather than saving it into their pockets. Although we believe that it is the corporation's duty to maximize profits for shareholders, isn't better if the whole society will benefit from it?...