Legitimacy and the VAT

There are many reasons for the growing clamor to reduce the VAT on oil products. But the two most important are: first, because the VAT on fuel rises with every increase in the price of oil, the public sees it as an infinite burden; and second, because the utilization of the windfall revenue from the VAT on oil seems whimsical and unplanned, the public thinks the money is not really going to the poor, as the government claims.

If a taxpayer’s earnings this year are more than his earnings last year, he would normally not mind giving a little more of what he earned to the government.  Similarly, if, because of the improvement in his income, he is able to buy more things than he usually does, he would not mind paying more in consumption taxes. But if his income has not increased, and, on top of this, the prices of goods have risen sharply, he will naturally feel outraged at being made to pay more in taxes for the same amount of goods.  To suggest that he should now reduce his consumption, when his purchases are already pared down to what he believes to be his minimum, is to be insensitive to his plight.  He would surely demand an accounting.

This brings us to the second point.  Taxes and elections are the two main markers of the stake we have in the business of government. Taxes are always a burden to the public; still we pay them because we are aware that someone has to foot the bill.  When governments do their work and the use of public power and resources is beyond question, the national morale tends to be high.  But when we suspect that public funds are not being properly used, and public power is employed for private gain, we feel shortchanged.

This is where we are today.  Public morale has sunk so low that, more than the suspension of the VAT, what many fervently wish for is the ouster of government itself. Apart from impeachment, which has been tried twice against the Arroyo regime to no avail, there is, of course, no such recourse under our Constitution.  What we have instead is the mechanism of periodic elections as the prescribed means for replacing wielders of public authority.  But, elections in our country are losing their value as instruments of legitimation.  Indeed, there is a growing perception that, because of the ease with which electoral results are manipulated, as shown in the past two elections, they no longer reflect the will of the people.

In spite of this, our people look to the 2010 presidential elections as a source of relief from a burdensome regime, whose right to govern they have repeatedly questioned.  Going by the national record of two people power upheavals against two sitting presidents, there is no way Gloria Macapagal Arroyo could have stayed in power this long without further undermining the foundations of the political system. This, as we know, is precisely what has happened.  Yet, to their credit, our people continue to participate in elections and to pay their taxes.  How does one explain this?

Something is happening to today’s societies, says the German sociologist Niklas Luhmann, that is re-defining the meaning of political legitimacy.  No longer is this primarily dependent on the active consent or participation of the governed, nor by the charisma or special attribute of leaders.  Legitimacy today is mainly secured by wielders of authority when they can give a persuasive account of their policies and decisions. This eliminates the traditional conception of legitimacy as based on consensual, democratic, or moral principles. By this definition, if the government can motivate the citizens to comply with its laws, then it is legitimate.  Accordingly, if Filipinos find Ms Arroyo’s recent State of the Nation Address plausible and convincing, then she can claim legitimacy.

But, a recent survey by Pulse Asia showed that only 14% of Filipinos expected Ms Arroyo’s 2008 Sona to be “truthful”, whereas 40% believed that, as in previous years, it will all be lies.  If these findings are representative of public sentiment, and there is no reason to doubt their validity, then this presidency is in deeper trouble than it realizes.  What it faces is the looming force of civil disobedience in search of expression.

“For footing the bill, I thank the taxpayers,” Ms Arroyo said at one point in her latest Sona.  One wonders how many taxpayers who were listening could summon the graciousness to respond, “You’re welcome.” The truth is that most Filipino taxpayers pay the VAT not willingly but grudgingly, not as an act of positive compliance, but as an act of coerced submission.  As the inflation worsens, the more the resentment grows because the public is aware that a huge chunk of the spiraling cost of goods is the VAT collected by government.  The people will insist on knowing where exactly all that money is going.

In many ways, although legitimacy has been de-linked from metaphysical notions, it is now harder for governments to earn it. Modern legitimacy is not an enduring quality gained in a one-time exercise such as an election.  It is ephemeral; it has to be constantly renewed and validated on the basis of its own operations.  Less and less can it be secured by appeals to unchanging principles or divine law.  Societies like ours are changing very fast; they become more complex in the process.  If governments fail to absorb this complexity into their own operations, and persuasively explain their actions to the public, they will lose their legitimacy and they will not survive.

 

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