Sin tax contrition: Palace now amenable to P40B revenue

Presidential spokesperson Edwin Lacierda. INQUIRER FILE PHOTO

After tangling with some senators, Cabinet officials have moved to bridge the big gap in projected revenue from the sin tax reform measure by offering a compromise amount: P40 billion.

Malacañang preferred a version that would generate P60 billion from taxes on tobacco and liquor, but was now amenable to lowering it to P40 billion, said presidential spokesman Edwin Lacierda.

“They are willing to accept a lower amount of P40 billion provided that the other objectives of the bill such as the health and the WTO [World Trade Organization] issues are addressed,” Lacierda said at a briefing, referring to the Cabinet officials. He has no details on the health and WTO issues.

Lacierda confirmed reports that in a caucus on Wednesday night with the senators, Finance Secretary Cesar Purisima apologized to Senator Ralph Recto over statements issued by Cabinet officials over his ways and means committee report on the bill.

“Just to be sure that I am not spinning this, I got word from Secretary Purisima and this is his text to me: ‘I, as lead Cabinet for this issue, apologized to Senator Recto for the misquotes and other statements that may be misinterpreted as unproductive.’ That’s what Secretary Purisima said,” he said.

In the caucus, Purisima, Health Secretary Enrique Ona and Internal Revenue Commissioner Kim Henares indicated that the revenue should range from P40 billion to P60 billion to have an impact on the population.

According to reports, an October 2 Department of Finance document addressed to Recto showed a revised estimate of P41.9 billion instead of the original P60 billion.

The caucus followed exchanges between Recto and government officials who expressed dissatisfaction with the report on Senate Bill No. 3299 by the committee on ways and means pegging the incremental revenue at P15 billion, way below the P60 billion.

Confident that the kinks would be ironed out in the caucus, President Aquino on Wednesday expressed optimism Congress would approve the measure ahead of the May 2013 elections.

Comparison of benefits

Lacierda compared the benefits of generating either P60 billion or the lower P40-billion revenue.

“The idea for P60 billion is that we’re able to address the health care coverage in this number of years. We know if we’re down (by) P20 billion the health care would extend a little bit; the coverage will extend a little bit longer than necessary,” he said.

Ideally, a P60-billion revenue would be “a victory for the Filipino people,” Lacierda added.

With a revised estimate of P40 billion, Lacierda expressed hope that this would make it easier for senators to pass the measure.

“We hope it would. For as long as what Secretary Purisima said that the other issues such as the health and the WTO issues are addressed. I have no specifics on what those WTO issues are,” he said.