Palace, Senate settle Sin Tax bill issue

MANILA -- The Senate and Malacañang settled Wednesday an issue that marred the controversial Sin Tax Bill and the resignation of Senator Ralph Recto, chairman on ways and means committee.

During a closed-door meeting in the Senate, Recto patched things up with four administration officials -- Secretaries Enrique Ona of Health, Cesar Purisima of Finance and Bureau of Internal Revenue commissioner Kim Heneres and Presidential Legislative Liaison Office Secretary Manuel Mamba -- who criticized his version of the six tax reform bill.

Speaking to reporters after Wednesday's caucus, Recto said Purisima apologized to him. Purisima also said sorry on behalf of Henares, Ona, and Mamba, who was quoted in reports as accusing lawmakers of receiving bribes from tobacco companies.

"That is good enough for me," Recto said. "The apology is there. Well accepted. We are all professionals. Hindi naman kailangang magsamaan ng loob."

Recto also said the administration officials proposed a new revenue target from sin taxes: P40 billion instead of the original P60 billion.

Still, Recto expressed doubts if it is achievable.

"I doubt it very much if we can get there," he said.

Recto has been criticized for lowering the projected revenue from sin taxes to only up to P20 billion in his version of the measure.

Senator Gregorio ‘Gringo’ Honasan told the media that according to Mamba there was misinterpretation in the media report which quoted him saying, “Anyone who would not support this very popular measure is subject to suspicion that he has received lobby money or that he was bribed by the lobby groups of big multinationals.”

“In my understanding, Mamba was asking for an apology on the issue,” Honasan said.

Amid criticisms of his committee report, Recto resigned last Monday as chairman of the committee on ways and means and recommended the withdrawal of his own version Senate Bill 3299.

Recto’s report showed the measure targets tax collection of P15 to P20 billion from alcohol and cigarette products for the first year of the implementation of the measure.

Based on the original version submitted by the Finance department, the target tax collection in the first year of implementation is P60 billion both from alcohol and cigarette products.

Senator Franklin Drilon, who has been designated as acting chairman on ways and means committee, announced his intention to adopt Recto’s committee report to hasten the passage of the bill.

Recto opposed Drilon’s plan, insisting that the Senate should instead adopt the Senate version filed by Senator Miriam Defensor Santiago or the House Bill 5727 which trimmed down the target collection to P31 billion, including P27 billion from the cigarette products.

Recto is willing to sign a different committee report even if it would recommend P60 billion revenue collection target.

Recto expressed discomfort with Drilon's suggestion to still debate on his assailed committee report, saying it was his intellectual property.

"Why plagiarize my report? Why use my report if they think that it was so bad. Isn't that the reason I was criticized," he said.

Recto pointed out, however, that he worked hard for weeks to produce the report, which he says was well-written.

"I wrote it. Let them write theirs," he said. "It is the product of my own mind."

Members of the committee will meet to discuss whether they will still use Recto's committee report.

Recto said he will "respectfully request" that they craft a new one based on data presented in the committee hearings, and promised that he will sign it.

He suggested that they use Senator Defensor-Santiago's version, where projected sin tax revenues are close to the administration's aim of P60 billion. Defensor-Santiago has expressed apprehensions over Recto's version, even calling it a "death star bill."

Asked how he would react if his colleagues insist on using his committee report, Recto quipped, "Well, thank you for plagiarizing my report."

Even if he had resigned, however, Recto said he will participate in floor debates on the measure as a regular committee member and defend his views.

Recto stressed that his version of the measure, where the government stands to earn P15 billion to P20 billion from excise taxes, is reasonable and will not lead to a massive loss of jobs in the tobacco and alcohol industries.

"I'm not abandoning my position," he told reporters. "My job is to show our colleagues my findings. That's it. And let everyone vote. I will fight for a responsible, fair version."

But he vowed that he will not be an obstacle to other senators who want higher taxes.

On Tuesday, Drilon said he would rather keep the Recto version since it can be amended anyway on the floor and to avoid repetitive hearings.

Health Justice Philippines urged Drilon to consider pulling out the report submitted by his predecessor.

"Much better if it is pulled out because the Recto report is really problematic and it favors the tobacco companies and would not curb the smoking epidemic," said Health Justice managing director Irene Reyes.

If not, she said their group and other health advocates could only hope that the controversial report is aptly amended.

"If the Senate decides to use the report for expediency, we hope that they will scrutinize the provisions and amend the problematic areas so that we can push for a stronger tobacco tax law," said Reyes.

The group meanwhile is hoping that Drilon could do a better job than Recto.

"We hope Senator Drilon, who has always been supportive of health priorities, would push for an effective tobacco tax policy. We really need to curb the tobacco epidemic in this country and a strong tobacco tax law will," said Reyes.

Drilon has expressed his intention to introduce amendments to the bill and make the projected revenue closer to P60 billion. (Virgil Lopez/HDT/PNA/Sunnex)