Leave the Senate alone to do its job, thank you very much.
Senate President Juan Ponce Enrile assailed Internal Revenue Commissioner Kim Henares’ supposed feelings of betrayal over Sen. Ralph Recto’s reporting out a Senate version of the sin tax measure that would reduce the projected income from the tax from P60 billion to P15 billion.
“Why should they feel betrayed? That is not their money. That is money of the people and for the people,” Enrile said.
The Senate President said executive branch officials should just let the Senate do its job of coming up with a sin tax law.
“Every tax measure is subject to scrutiny by Congress. Congress is the one that raises the revenue for the state, no one else,” he said.
Enrile said he understood that President Aquino would want Congress to approve his priority bill that would modify and impose a uniform tax rate on tobacco and alcohol to increase government revenues from the so-called sin products to P60 billion.
“[But] we are not the rubber stamp of anybody. We are independent minds elected by the people to do a job objectively for their interest and not the interest of anyone,” Enrile said.
Enrile, an acknowledged tax expert, appears to favor Recto’s proposal of a three-tier tax rate for tobacco and alcohol products.
“Having been in this field for a long time as an employee and as a professional—this is where I got my master of laws—you have to be very careful in imposing a tax,” he said.
During the committee hearings, Enrile, a native of the tobacco-producing province of Cagayan who served as finance secretary under the late dictator Ferdinand Marcos, warned of widespread smuggling if sin products are taxed too high.
However, the Senate President is sure to encounter strong opposition from the President’s allies in the chamber as well as from Sen. Miriam Defensor-Santiago, one of the authors of the sin tax bill, who called the report of Recto’s ways and means committee a surrender to the tobacco and alcohol lobby.
Sen. Sergio Osmeña III, one of President Aquino’s allies, said he would challenge the assumptions that the Recto committee used in coming up with a bill that prescribes tax rates lower than those that the administration wanted.
Santiago’s bill aimed to generate P60 billion a year from the measure. After the Santiago bill went through the committee approval process, the revenue target was set at P15 billion for the first year.
The House of Representatives earlier passed its own version that projected annual revenues of P31 billion.
Told that Santiago was calling on students and netizens to declare war on Recto’s version of the sin tax bill, Enrile said: “Let her have her war if she wants to do it.”
The President’s allies appear ready to push his agenda in the Senate.
Osmeña, who appears to believe Finance Secretary Cesar Purisima’s claim that it would be possible to collect an additional P60 billion from the alcohol and tobacco industries, said the assumptions used by the Recto committee were wrong.
“We’re going to challenge those assumptions during the period of interpellations,” he told reporters.
He said he didn’t expect to see smokers quitting entirely because of the higher prices of cigarettes. They’d only shift to lower priced brands, he said.
For unitary tax rate
Sen. Franklin Drilon, the chair of the finance committee that goes through the budget proposal, also indicated he would push for a more immediate implementation of a unitary tax rate for all sin products.
Recto’s version allows for a prescribed period before the three-tier tax system is collapsed and a shift made to a unitary system.
“There should only be one rate as soon as feasible. Eight years of a period within which it will become one rate is too long,” Drilon said.
Besides, he said administering the three-tier system would be difficult. It would also make cheaper cigarettes more easily available to the poorest, more vulnerable sectors.
“They are the ones who would go to public hospitals and would have to be responded to by public health allocations,” he said.
Recto has called for calm and sobriety, saying his committee’s version of the sin tax bill will still undergo debate and amendments in the plenary. “Let’s debate on this. This is just the initial presentation,” he said.
“They were not the only ones who lost sleep here. My staff and I also worked long hours the last two weeks to come up with this committee report,” he said in a phone interview.
He said the criticisms would have been deserved if he had just sat on the measure instead of working hard to come up with what he thought was the right balance between revenue generation and preventing industries from getting taxed to extinction.
He said that based on the figures submitted by the finance department and the Bureau of Internal Revenue, his proposal was more realistic about generating revenues and decreasing the consumption of sin products than that of the two agencies.
‘Leap of faith’
“Mine is realistic. Theirs is a leap of faith,” Recto said.
He admitted to having been affected by insinuations that an industry lobby fund had influenced his report.
The senator said he would give up the chairmanship of the ways and means committee, if there were any takers to replace him.
The reason he continues to stay on the job is that he doesn’t want the approval of the sin tax measure to be delayed, he said.
Enrile said Recto’s sponsorship speech for the bill was one of the finest he had heard.
“That is the position taken by the chair of the committee on ways and means. That will be debated. Why should anybody insist on their version?” he said.
Moral suasion
Manuel Mamba, the head of the Presidential Legislative Liaison Office (PLLO), said Mr. Aquino could always use “moral suasion” to sway lawmakers in favor of the measure.
“This is a health bill. First, because incremental revenues will go to health services programs. Secondly, it discourages new entrants into the vice. The President is calling upon leaders of Congress to see this thing in this light,” he said.
The measure can still be “salvaged” as it is still being debated in the Senate plenary, Mamba said.
Deputy presidential spokesperson Abigail Valte said the health and finance departments had not given up on the measure.
“[They] will continue to work with other advocates to convince our legislators how important the sin tax measure will be to providing for more coverage for the universal health care program,” she said.
Valte said the team would always have their “eyes on the ball” and continue to provide resources and materials to the legislative staff. With a report from TJ Burgonio
First posted 11:53 pm | Friday, October 12th, 2012