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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Thou Shalt Not Pay Taxes

A resolution could make the Church cough up

By Antonio Lopez / Manila


THE CATHOLIC CHURCH HAS an iron grip on the moral life of the Philippines. Sometimes that influence reaches into the political arena. Not that the Church's clout there is omnipotent -- otherwise a Protestant president would not be sitting in Malacaņang Palace. Still, most politicians, including Fidel Ramos, think twice before tangling with the Church and its formidable chief, Cardinal Jaime Sin.

But not Gregorio "Gringo" Honasan and Juan Flavier. The two maverick senators have floated a controversial resolution that aims to lift the property and income tax exemptions on organized religions. Here's the spin: the money would be used for social programs to "improve the lives of all Filipinos." Says Honasan: "Our resolution is motivated by a sincere desire to provoke a sober, intelligent debate. We're not declaring war on the Catholic Church."

Many don't believe him. Both Honasan and Flavier have had run-ins with the Church. Cardinal Sin was none too pleased when Honasan tried to topple Corazon Aquino -- not once but six times -- during her presidential term. Flavier ran afoul of the bishops as Ramos's popular health secretary, when he championed a successful birth-control program that was a clear challenge to Church policies. When both men ran for the Senate in 1995, the "apolitical" clergy campaigned against them. Flavier was expected to win the most votes; instead he came in fifth out of 12. Honasan finished an unresounding ninth. Using a Senate resolution merely to settle old scores would be politically naive -- and neither man is that. Rather, their Resolution 706 may well be precisely what Honasan says it is not: the first shot in an undeclared war to curb the power of the Catholic Church.

Under the 1987 Constitution, churches, convents, mosques, charities and non-profit cemeteries are exempt from tax, though in practice they pay levies on commercial revenues and capital gains from land sales, among other things. When constitutional drafters exempted religious groups from most taxes, they did so, says Sen. Miriam Defensor Santiago, to prevent an unscrupulous administration from taxing out of existence any church it deemed hostile. In short, she says: "The power to tax is the power to destroy."

Honasan and Flavier, of course, deny any such motive, saying they merely want to boost government revenues and put them to good use. "We must seriously consider looking at sectors in society that are benefiting from tax-free privileges," says Honasan, "so we may offset this and support viable government programs." For his part, Flavier wants to go after what he calls "fake churches" that collect donations in the "name of religion." He says 50,000 groups declare themselves tax-exempt. "If 10% are fake, we're talking about 5,000 groups hoodwinking our people. This should be corrected."

Flavier also is gunning for legitimate groups that abuse the system. Some health organizations, he says, are claiming the religious exemption to avoid paying tax on imported medical equipment. And it is not uncommon to see supposedly ascetic priests and nuns riding in pricey, late-model cars brought into the country tax-free. The exemption, Flavier says, is a state-given privilege. Hence, "it is the right of the state to study it and, if need be, remove it."

Naturally the Catholic Church has quibbles with the senators' resolution. Cardinal Sin mutters about violating the separation of church and state, having presumably forgotten his pivotal role in the People Power revolution that toppled strongman Ferdinand Marcos in 1986. But the portly Manila archbishop has some strong arguments for not taxing the Church.

Filipinos try to get their kids into one of the nation's 2,000-plus Catholic schools because they provide superior education. If taxes were levied against the Church, it might have to close schools, not to mention leprosy clinics, dispensaries, credit unions and so on. From the hierarchy's perspective, the Church is doing many of the social-welfare tasks that the government should be but doesn't. "If the Church is forced to close most of its schools," asks Monsignor Artemio Baluma, "can the state absorb the students?" With more than 1.6 million Filipinos attending Catholic schools, the answer probably is no.

Honasan is unswayed by the arguments of Cardinal Sin and others. "Taxing the Church is an issue we've avoided not just for decades but for centuries," he says, "simply because of fear of the Church." Honasan believes such fear is unfounded. "There is no such thing as a Catholic vote. That's why Ramos won. That's why I won despite the Church boycott." He says while Ramos and his cabinet publicly support the exemption, "deep in their hearts they're not for it." Even if Honasan is right, Ramos is not about to pick a fight with the Church. Backers are pushing for a constitutional amendment to extend his term, and Ramos does not need Cardinal Sin badmouthing him all over again.


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