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Heavy fire prompts Recto to quit sin tax job

By: - Reporter / @KatyYam
/ 12:56 AM October 16, 2012

Senator Ralph Recto. INQUIRER FILE PHOTO

Sen. Ralph Recto on Monday resigned irrevocably as chairman of the ways and means committee, saying executive officials who helped him craft the report that sought to raise taxes on liquor and tobacco were the first ones to attack it after he delivered it on the floor.

But the Senate leadership deferred the acceptance of Recto’s resignation.

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Recto did not name the officials but descriptions he gave in a privilege speech referred to Finance Secretary Cesar Purisima, Health Secretary Enrique Ona and Internal Revenue Commissioner Kim Henares.

Recto also withdrew the controversial 30-page committee report that critics described as “watered down.”

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He said it was “untenable to continue defending (it) when people who (are supposed) to backstop me from the Department of Finance (DOF) and the Department of Health (DOH) would not be with me.”

The three executive officials were among those who raised a howl after Recto announced that his report would raise only P15 billion in additional sin taxes from liquor and tobacco.

Malacañang wanted P60 billion in additional revenue from sin taxes. Sen. Franklin Drilon, chairman of the Senate finance committee, said this projected amount had already been factored in the proposed 2013 national budget.

‘Lobby money’

Recto also complained about insinuations that his report was the fruit of lobby money that allegedly flowed into the chamber.

Senate President Juan Ponce Enrile has asked for an investigation of this allegation. He noted that it was Presidential Legislative Liaison Office head Manuel Mamba who was quoted by the Philippine Daily Inquirer as saying that “big lobby money” was the reason no other sin tax measure had been approved for the past 15 years.

Mamba was also quoted as saying that a legislator who would not support the “popular” sin tax measure “is subject to suspicion that he has received lobby money or that he was bribed by the lobby groups of big multinationals.”

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Punching bag

“I am the national punching bag of the week,” Recto began his speech Monday afternoon.

“I am not hurt if my critics condemn me. But I will be lying if I will say that I am not affected by the unfounded criticisms of my friends in the executive (department),” he added.

Recto said Mamba’s insinuations meant “you know that the trust is gone.”

False data

“If one day you hear on radio that a ranking revenue official uses false data, magtatampo ka rin talaga,” the senator went on.

Recto said this official argued that the government was spending P155 billion yearly to fund medical services for four deadly diseases caused  by smoking.

The senator said he went to check this detail in “budget documents” and found out that the national and local governments, and government corporations would spend P59.7 billion for medical care for these diseases this year and P56.2 billion in 2013.

“Worse, the good commissioner’s erroneous data have been repeated, retweeted and retold and have been used as a main fodder against the bill,” Recto complained.

The senator said a statement attributed to the Department of Health said it did not care if collections from sin taxes fell as long as the incidence of smoking was reduced.

“If that is the case, a measure banning smoking should have been proposed and heard by the (Senate) health committee instead of making this a taxation issue. If a substance kills, we do not tax it. It should be banned. Tax does not detoxify a product,” he said.

Recto then trained his guns on the Department of Finance, recalling that its officials once insisted that the government would need P100 billion for health care, instead of the P60 billion officially proposed by Malacañang.

Which brought the senator to note: “If you raise that amount, you will have to sell more unhealthy products that will cause more sickness and death.”

Recto added that the P60-billion revenue target was already the DOF’s “most optimistic assumption because its officials admitted that P42 billion annually was the most it can yield.”

The senator said that during his meetings with DOF officials, “they have raised the white flag on that projection as unachievable. Ask their own number crunchers if this is true. But until now, they insist on a mantra of P60 billion.”

“Even some of our friends at the House (of Representatives) are echoing that demand. They’ve conveyed the request that we in the Senate restore the cuts that they’ve made. This made me think, if congressmen have shaved P30 billion from projected revenues, why are they asking the Senate to put it back?” Recto said.

Scapegoat

The senator said that even if the Senate raised the projected sin tax revenue to P40 billion as a compromise, he, as chair of the ways and means committee, would remain a scapegoat.

“I am stepping aside and relinquishing my position to a senator who can better fight for what the Department of Finance wants,” he added.

“Historically, the journey toward a new tax law is always undertaken by the Senate chairman of the ways and means committee and the DOF riding in tandem. What the emerging situation now is that my position is no longer in synch with my supposed principals,” Recto said.

“Because I am now seen as an obstruction and viewed with suspicion, then I have to take myself out of the equation… My friends in the finance community should be disabused of the mistaken belief that the person they are backstopping appears to be backstabbing them,” the senator said.

“This will also spare my friends in the DOF and the DOH of having to talk to each one of (the senators) in marketing their version’s supposed superior traits. My resignation will also cure a perceived anomaly by political partisans who treat my criticism of an administration measure as a betrayal of my duties as a Liberal Party senator,” he added.

Still, Recto pointed out that some lobby groups were being funded by “the foundation (of) Mayor (Mike) Bloomberg of New York City with the marching order to agitate for the imposition of New York City tax rates on the likes of Bataan Matamis.”

Enrile later said there was a Bloomberg Initiative grant program, started in 2006, “to support projects for tobacco control interventions.”

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TAGS: Government, Legislation, Ralph Recto, Senate, sin tax bill
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