Runaway TRAIN? Solon to ask SC to derail ‘railroaded’ tax bill

Deputy Majority Leader Arthur Defensor Jr. moves to ratify the bicameral report on the tax reform bill without a lot of warm bodies in the plenary hall. Deputy Speaker Raneo Abu hurriedly approves it, despite Rep. Antonio Tinio shouting his objection in the background.

Was the TRAIN railroaded by the House of Representatives? It should be derailed by the Supreme Court, if it were up to ACT Teachers Rep. Antonio Tinio.

Tinio questioned the ratification of the Tax Reform for Acceleration and Inclusion bill past 10 in the evening on Wednesday, citing the lack of voting or even a quorum.

This was not the only last-minute hang-up faced by the bill on the last day of Congress’ session for the year.

The Senate’s ratification of the bicameral conference committee report, which reconciled conflicting provisions in the two chambers’ bills and finalized the measure for Mr. Duterte’s signature, also took place past 10 in the evening.

This was because Senator Loren Legarda and Joel Villanueva initially said the repeal of the tax exemption on locally produced coal was “deleted” from the report. Voting still pushed through, and neither senator cast a vote of “no” for TRAIN.

House Deputy Speaker Miro Quimbo denied the “deletion” of the tax exemption repeal, saying lawmakers never even agreed to the proposal raised by one senator during the bicameral conference’s two-week deliberation.

President Rodrigo Duterte had championed the measure, with the increase in taxes on consumer goods funding his administration’s intensified push to “build, build, build” public infrastructure.

Objection ignored

Tinio said there were barely 10 people on the floor when Deputy Speaker Raneo Abu, who presided over the session, approved the motion of Deputy Majority Leader Arthur Defensor Jr. to ratify the bicameral conference committee report.

“Any objection? There is none. The motion is approved,” Abu hurriedly pronounced, ignoring Tinio’s screams in the background of “Mr. Speaker, objection! Objection!”

Unlike the Senate, no voting took place. The adoption was over in just the last two minutes of the six-hour plenary session, a livestream of which may be viewed at

Tinio called the ratification “a total farce and travesty of so-called representative democracy,” saying lawmakers were not even furnished their copies of the final report before its adoption.

‘Partying while taxing the people’

He claimed many were actually partying with the ruling Partido Demokratiko Pilipino–Lakas ng Bayan (PDP-Laban). “That’s how it is in Congress—there’s a vote even if there’s no one, they’re partying in a five-star hotel while imposing burdensome taxes on the people,” he said.

Tinio cited Rule X, Sec. 63 of the Rules of the House of Representatives, which stated: “A conference committee report shall be ratified by a majority vote of the Members of the House present, there being a quorum.”

“Since there was no quorum and no actual vote was taken, the alleged ratification is clearly invalid. The brazen railroading of this TRAIN wreck on the poor exposes yet again the blatant disregard of the Duterte administration and its Supermajority in Congress for even the most minimal standards of democracy,” he told reporters.

His ally, Bayan Muna Rep. Carlos Isagani Zarate, said in a separate statement that the progressive Makabayan party-list bloc is “studying all our options, including legal, to question and stop this railroaded anti-people tax reform package.”

“Obviously the runaway train that would wreak havoc on our people with new burdensome taxes was not validly ratified and legally infirm,” he said.

Presumption of regularity

But such a legal challenge would have to overcome the presumption of regularity in official actions, said Albay 1st Dist. Rep. Edcel Lagman of the opposition Magnificent Seven bloc, who did not receive a copy of the report either.

In a press conference, Lagman said he was in his office waiting for the copies of the report to arrive—only to hear over the sound system that it was being adopted right then and there.

“There is a presumption of regularity that the bicameral report was circulated to members, that sufficient members were present, and that journals would prevail over the statements of individual members,” he said. “I think there was a violation of the rules of plenary. It can always be challenged but there are always presumptions.”

Majority Leader Rodolfo Fariñas told reporters that House members could contest the presiding officer’s report for the session by “bring[ing] it to the attention of Plenary or, if not contented, to the courts.”

Parañaque City 2nd Dist. Rep. Gus Tambunting, a member of the House delegation to the bicameral conference, said: “We would be interested to see the proof that Cong. Tinio can offer to substantiate his allegations.”

Coal

The tax exemption for local coal producers under Sections 16(a), 16(b) and 17(a) of Presidential Decree No. 972, meanwhile, survived the night.

As incentive for local production, dictator Ferdinand Marcos granted exemption from all taxes except income tax, as well as payment of tariff duties and compensating tax on imported equipment.

Quimbo said it was “incorrect” to say that provision was repealed because “the House [contingent] never agreed to that repealing clause” during the deliberations.

“One Senator proposed it but it never got the consensus, particularly the House members,” he said.

Separately, Tambunting said: “It is irresponsible to make these comments especially when bicam members appear to favor particular energy sources, for what would appear to be conflicts of interest.”

“We question the propriety of pushing for removal of tax exemptions on coal and then bending over backwards to keep exemptions on renewable energy, especially since this ignores the reality on the ground [that] there are simply more coal fired plants as opposed to RE plants,” he added.

Incentives to be removed 2018?

Multisectoral alliance Sanlakas released to media a copy of the report where the repeal was supposedly marked “deleted,” but Quimbo said it could have been a draft that was not adopted to begin with.

Instead, he said TRAIN introduced only excise taxes on local coal producers, as Congress plans to ease out other tax incentives in a second wave of tax legislation in 2018.

Section 48 of the measure (under page 74 of the report) imposed the excise tax on “domestic or imported coal and coke, notwithstanding any incentives granted in any law or special law.”

An excise tax of P50 per metric ton will be imposed starting Jan. 1, 2018, P100 starting Jan. 1, 2019, and P150 starting Jan. 1, 2020.

Quimbo said “it was clear to us that any repeal of an industry incentive is better taken up” when Congress starts tackling the so-called “package 2” of the TRAIN. This first wave of tax adjustments, after all, focused on levies on consumer goods and lowering of income taxes.

“That way we could see the actual data coming from the Tax INcentives Transparency Law (TIMTA) which now mandates incentives to be recorded by the BIR. We didn’t even know how much the industry was getting in terms of incentives. A deeper study with the other incentivized industry will be made for package 2 next year,” he said.

“In short, if there was an agreement with regards to P.D. 972, it was only as regards the removal of the Excise Tax exemption,” he added.

Tambunting echoed Quimbo’s explanation, saying the House and the Senate took a “middle ground” of imposing an excise tax on domestic coal without removing the exemption from value-added taxes.

“The bicam report sent for signature of both contingents was never altered and clearly indicated the agreements reached by both panels,” Tambunting said in a text message.

“Accusations of “magic” or of any alterations in the bicam report, if not supported by evidence are irresponsible and will only serve to cast doubts on the integrity of the legislative processes and institutions,” he added.