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Wednesday, January 05, 2005
Senators doubt early passage of tax bills
MANILA -- Administration and opposition senators doubt if tax measures like the Lateral Attrition bill would be approved in the three-day special session called for by President Arroyo.
Senator Ralph Recto said Malacaņang should spend its political capital on endorsing amendments to the Value-Added Tax (VAT) law and not the Lateral Attrition, which he described as mainly a management tool and not a revenue generating measure.
But since Malacaņang has already set the agenda, which is the attrition bill, and because the VAT bill has not been discussed in the Lower House, the Senate has no choice but to continue debating in the attrition measure during the start of the special session on Wednesday, Recto said.
Recto assailed Malacaņang for proposing a "tsunami of taxes".
He warned that "a tsunami of taxes" will adversely affect the people this year unless Malacaņang tempers its tax proposals.
Recto said the Senate will not approve taxes that will hurt the people and will instead fight for lower tax rates.
"The duty of the Senate is not to outbid the administration as if taxation were an auction. We take the path of haggling them down," he added.
Based on a finance department proposal, a two-peso per liter increase in excise tax will be imposed on all fuel products and also an increase in VAT from 10 to 12 percent is being pushed.
Recto stressed that the passage of the two taxes is a "giant double whammy".
He said VAT plus a higher excise tax on fuel "is politically combustible that would destroy the administration proposing them".
Senate Minority Leader Aquilino Pimentel Jr., meanwhile, said Arroyo should have consulted Congress first before calling for a special session.
Pimentel said members of Congress were caught flat-footed when they were informed about the decision.
He added that the President only wants to please international creditor banks and credit-rating agencies in the face of a reported threat to downgrade the country's credit rating.
The senator said the Senate could not be rushed into approving the tax bills because of the many questions that still remain unresolved.
He doubted whether Congress could muster a quorum for the three-day special session.
Despite predictions of doom and opposition to the special session, Senator Rodolfo Biazon is confident that Congress can do something fruitful during the three-day special session.
Biazon is certain that important tax measures like the Lateral Attrition bill would be approved, especially if the Senate can generate a quorum for the special session.
Senate President Pro Tempore Juan Flavier said Malacanang, after conducting a head count, assured him there would be quorum.
But as of Tuesday, five senators were still out of the country and there is no confirmation yet if they would cut short their Christmas vacation.
Senate President Franklin Drilon is in San Francisco, but is expected to arrive Wednesday morning while Senator Ramon Magsaysay Jr. is in Florida.
Senator Manuel Villar is also in the US while Senators Luisa "Loi" and Jose "Jinggoy" Estrada are both in Hong Kong, accompanying former President Joseph Estrada who underwent knee surgery there.
In Malacaņang, Budget Secretary Emilia Boncodin said Tuesday that President Arroyo is just holding Congress to its commitment to pass the Lateral Attrition bill by calling for a special session.
Boncodin said Congress had promised to Arroyo during the last meeting of the Legislative-Executive Development Advisory Council (Ledac) last year that it would pass specific revenue measures.
"I think everybody in that room expected that that commitment is going to be honored. I guess that's the reason why the President called for a special session, to make sure that the commitments made during that Ledac meeting will actually be satisfied," she said.
"And calling a special session is not something that should be taken lightly. It's a very serious matter because everybody is on vacation and to call them back to special session really is a big sacrifice on everybody's part. So I think when the President called the special session, it is with a definite purpose and the purpose is to make sure that the revenue measures that have been committed will actually be passed in Congress," she said.
Boncodin is hoping that the Lateral Attrition bill will be passed during the special session "because we do need the revenues this year."
"I think the President expects something to come out during this special session, especially on the measures which are urgently needed," Finance Secretary Juanita Amatong said.
Amatong said she is not aware how much revenue the attrition bill would raise because it provides incentives to employees of the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) who reach their target collections and punishment for those who fail.
She said "punishment" means taking the BOC and BIR collectors out of their present position and putting them in a pool of civil servants where their talents can be used by other agencies. (JPM/JMR)
(January 5, 2005 issue)
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