Disappearance of provision removing coal’s tax holiday stumps 2 senators

Senator Loren Legarda. FILE PHOTO

At least  two senators protested  on Wednesday what seemed  to be   “magic”    in the  proposed tax reform  measure when a provision that would have  lifted the  tax exemptions on  local coals  suddenly disappeared in the approved  report of the bicameral conference committee.

Senator  Loren Legarda,  chair of the Senate  committee on finance,  explained that in the bicam, the Senate and  the House of Representatives have agreed to  repeal the tax exemptions on  local coals.

At present, Legarda said, local coals are exempted from any form of tax as provided under Presidential Decree (PD) No. 972 issued during the time of the late President Ferdinand Marcos.

But the Senate, in approving the tax reform measure, included a provision that would have repealed the PD. The Senate version, she said, was adopted in the bicam.

“Meaning mapapatawan na ng excise at ng VAT (value-added-tax) ang lahat. Local at imported. Di ba patas lang yun?” she told reporters.

Legarda said there were talks, however, that a “different” bicam report suddenly surfaced where the said repeal on the tax exemption was nowhere to be found.

While she had not seen it herself, she said: “May mga agam-agam at sabi-sabi na meron daw ibang bicam report na merong nag-magic at nawala na ibang provision pero ayokong magsalita nang hindi ko nakikita.”

“I believe that both houses of Congress must abide by whatever discussions have been agreed upon in the bicam. Anything outside of what was agreed upon is not part of the bicam. I am simply for the preservation and protection of the integrity of the process,” the senator added.

Legarda clarified that she was not the one who initiated the repeal of the tax exemptions on local coal but Senator Joel Villanueva and the Department of Finance (DOF).

“Ako lang nagsasalita kasi ang gusto ko magpakatotoo tayo at panindigan natin ang integridad ng proseso na hindi nagbabago pagkatapos ma print ang report,” she said.

“Hindi dapat nag-iba, hindi dapat nama-magic. Hindi dapat nawawala. Hindi rin dapat may nag-a-appear. Yun lang simple,” she added.

Villanueva confirmed that the supposed bicam report had been altered.

He explained that the two chambers had supposedly agreed to lift the tax exemptions but when the bicam report came out, the said provision had been removed.

“So parang totoo lang na merong third Congress,” he said in another interview.

Asked where he thinks the changes happened, Villanueva said it would be hard to speculate since he was not a member of the bicam.

“But it appears that it’s the House contingent…,” he said.

Villanueva lamented that the local coal had already been enjoying the tax holidays for more than four decades.