Cabinet execs tell senators sin tax should generate P40B to P60B

Communication Secretary Ricky Carandang

Top administration officials on Wednesday told senators that the sin tax reform measure should generate between P40 billion and P60 billion to have an impact on the population, but left it to the lawmakers on how to proceed, Communication Secretary Ricky Carandang said.

Finance Secretary Cesar Purisima, Health Secretary Enrique Ona and Internal Revenue Commissioner Kim Henares met with the members of the Senate committee on ways and means in the Senate in an effort to thresh out major differences in the measure.

“Our health, finance and BIR officials reiterated our position that we need at least P40 billion to P60 billion to make the bill meaningful to us. That’s the gist of the meeting,” Carandang said by phone, quoting Henares. “It will be left to the ways and means committee how to proceed.”

In the caucus sought by the executive branch, the senators asked finance officials how much revenue they hoped to generate to make the measure “meaningful,” Carandang said.

Apology

Following the caucus, Senator Ralph Recto said last night that finance officials had abandoned their target of P60 billion from higher sin tax rates.

Recto said the officials also apologized in the wake of remarks attributed to Presidential Legislative Liaison Officer Manuel Mamba that senators who did not support a popular measure like the sin tax reform bill were open to suspicion of receiving lobby money.

“They said they were misquoted and they apologized for what transpired,” Recto said in a telephone interview.

Asked which media report the officials claimed they were particularly misquoted, Recto said, “Basta they apologized that’s enough for me… I’m rather conciliatory.”

“Secretary Purisma apologized for all of them,” Recto said.

Asked if the secretaries were also taking back their criticism of Recto’s committee report for a sin tax measure that was expected to generate just P15 billion, Recto said, “They’re now saying the P60 billion is no more; it’s down to P40 [billion].”

“And that’s based on the best possible run… They have in effect abandoned the P60 [billion], which we know is not true,” said Recto, who resigned as chairman of the Senate ways and means committee on Monday amid sharp criticisms of his report.

Aquino confident

Earlier in the day, at a forum hosted by the Foreign Correspondents’ Association of the Philippines, President Aquino expressed confidence that Congress would approve the measure ahead of next year’s elections.

“There are several senators who are opting to run in next year’s elections—incumbent senators who will ask for reelection. And how can anybody say that they are opposed to an effective sin tax measure that is there in politics? So do we need a Plan B if it doesn’t pass? I really am confident it will pass,” he told the forum at the Manila Hotel.

Aquino said he had sent a clear message to his allies in the Senate how crucial the sin tax measure was to the administration’s agenda.

“Will it pass given the tightness of the schedule? I think there is sufficient time to really thresh out all the details and come up with something that they can fully support,” he said.

The President said that while tax collection had improved during his two-year presidency, this should be stepped up.

“You know, the only tax we want imposed or we want to have an increase is the sin tax issue. We started at 13-percent tax collection efficiency measured against GDP (gross domestic product). We are now at 15 [percent], the target is 18 [percent]. So, yes, tax administration has improved under our watch by a significant two percent,” he said.