Written by Ferdinand D. Tolentino, 25 January 2007
During our colonial years, the “cedula” was an identification card that had to be carried at all times. Failure to have it in one’s possession could earn him a few days of quality, silent time in the local stockade. One hundred eleven years after Bonifacio’s cedula-tearing, rabblerousing Cry of Balintawak, the “cedula” is still very much around, making its presence felt in the lives (and pockets) of Filipinos.
At this time of the year, most of us do our annual pilgrimage to our respective city or municipal halls or barangay centres, to pay our community tax and get the corresponding “cedula” or community tax certificate (CTC). This annual trek is, in a very real sense, imposed on us by the Local Government Code of 1991 (LGC). This LGC mandate just carried on with modifications, what was then called the residence tax under Presidential Decree 231 (1973), and under Commonwealth Act No. 465 (1940).
Under the code, every inhabitant of the Philippines eighteen years of age or older who has been regularly employed on a wage or salary basis for at least thirty consecutive working days during any calendar year, or who is engaged in business or occupation , or who owns real property with an aggregate assessed value of one thousand pesos or more, or who is required by law to file an income tax return, shall pay an annual community tax of Five pesos and an annual additional tax of one peso for every one thousand pesos of income regardless of whether from business, exercise of profession or from property, which in no case shall exceed five thousand pesos. For husband and wife, the additional tax herein imposed shall be based upon the total property owned by them and the total gross receipts or earnings.
Likewise, every corporation, no matter how created or organized, whether domestic or resident foreign, when engaged in doing business in the Philippines, shall pay an annual community tax of five hundred pesos and an annual additional tax, which in no case shall exceed ten thousand pesos, based on a schedule provided in the law.
The tax accrues on the first day of January of each year and it is supposed to be paid not later than the last day of February of each year. If a tax is not paid within this period, there shall be added to the unpaid amount an interest of 24% per annum from the due date until it is paid.
People secure the “cedula” every year because this document is required in several official transactions with the government such as taking an oath of office upon election or appointment to any position in the government service; receiving any license, certificate, or permit from any public authority; paying income tax; receiving any money from any public fund; or transacting other official business. The “cedula” is also sometimes required to be exhibited to any person, officer, or corporation with whom a transaction is made or business done or from whom any salary or wage is received.
Sadly, the provisions on the “cedula” have, through the years, been among the easiest to circumvent. Many people are able to annually save not a few pesos by under-declaring their income, or worse, by claiming unemployment when they are very-much employed. This happens as city hall or barangay center workers generally have no way to verify whether one is employed or unemployed. So the tax cheater tosses his five peso (basic community tax) coin into the air and merrily leaves for home, thinking that he beats the system.
Thus, the “cedula” became like an ordinary commercial commodity which can be secured by anybody and anywhere even in public places outside the city or municipal hall such as plazas or train or bus stations, in certain cases. Because of the laxity in the process of issuing “cedulas”, overtime people have disregarded the importance and value of the “cedula”, unmindful of the fact that securing the same through misrepresentation may expose them to deficiency tax assessment and criminal liabilities. In a sense, the “cedula” has lost much of its reputation as a credible document to establish the identity of a person.
Congress review the local government code’s provision on the “cedula” to determine if legislative or administrative changes are necessary to give it more teeth. Moreover, local government units who are in-charge of the collection of the cedula should also review their current system/process of issuing “cedula” and install mechanisms to address the loopholes in its implementation. These positive moves will not only strengthen the cedula’s potential as a worthwhile source of revenue for the local governments but will also restore the “cedula’s” reputation and importance.
