Biz buzz: Businessmen unite vs ‘sin’ tax scheme
With all their vested and competing interests, the country’s business leaders are notorious when it comes to their inability to get behind a single mission.
But there are exceptions. Sometimes, these captains of industry can actually agree on something important—important enough for the welfare of the nation—that they can set aside their differences (petty or not) and push in the same direction.
We’re talking about the joint manifesto put out during the weekend by 14 major business groups, which have come together, political differences notwithstanding, to support the full implementation of the so-called “Sin Tax Reform Act of 2012.”
And getting behind this common cause are traditional rivals like the Makati Business Club and the Philippine Chamber of Commerce and Industry, which—although one will never hear their leaders say it openly—often find themselves on opposite ends of the local political spectrum.
Yes, both the MBC and the PCCI support the current Sin Tax Reform Law, along with the Employers Confederation of the Philippines; the Federation of Filipino-Chinese Chambers of Commerce and Industry; the Federation of Philippine Industries; the Financial Executives Institute of the Philippines; the Foundation for Economic Freedom, and the Management Association of the Philippines.
Also joining the crusade are the American Chamber of Commerce of the Philippines; the Australia-New Zealand Chamber of Commerce; the Canadian Chamber of Commerce; the European Chamber of Commerce of the Philippines; the Japanese Chamber of Commerce and Industry of the Philippines, and the Korea Chamber of Commerce Philippines.
Their common battle cry is to allow the Sin Tax Reform Law to “run its course” (language used first by Finance Secretary Carlos Dominguez III in a statement earlier last week).
What prompted this united stand? Well, there is a very strong lobby in Congress (and everyone knows how susceptible to particular types of lobbying the Lower House can be) to amend the law to retain the two-tier tax system for low- and high-price tobacco products and increase these tax brackets to P32 and P36 a cigarette pack, respectively—instead of allowing the law to unify the taxes under one rate as scheduled in January 2017.
The story everyone knows is that a unified sin tax rate will make it easier for the Bureau of Internal Revenues to collect taxes from all tobacco manufacturers, removing the discretion on classification, which can often lead to corruption (not to mention loss of revenues needed to fund the Duterte administration’s proposed P8-trillion infrastructure program).
But there is an unseen hand behind this lobby to retain the two-tier tax scheme. One particular tobacco player wants Congress to raise the tax rate for its market rival, which produces higher-priced products, while imposing a smaller increase on its own lower-priced products. If its proposal is adopted by Congress, this tobacco manufacturer’s products will remain affordable to the masses, while those of its rival will end up prohibitively priced, thus pushing more smokers to the low-priced manufacturer. One cursory glance at the tobacco manufacturing landscape will reveal the forces behind this hidden hand.
Mighty smart scheme huh? —DAXIM L. LUCAS
Mini reshuffle at Ayala
With conglomerate Ayala Corp.’s creation of AC Industrial Technology Holdings Inc. (AC Industrials)—which will house under one roof the group’s automotive and manufacturing interests—there will likewise be some leadership changes in the units involved.
AC Industrials president Arthur Tan is also set to become the steward of the AC Automotive Group, referring to the car dealership businesses across the Honda, Isuzu and Volkswagen brands plus the fledgling KTM motorcycle manufacturing and distribution business. Several executives have been enlisted to support Tan at AC Industrials in the coming year.
After handling the automotive business, John Philip Orbeta will move back to the parent company’s corporate resources group, human resources, information, communication and technology, knowledge management and corporate support services in the coming year.
He was asked to lead all initiatives meant to unlock synergies within the group under a new unit called AC Synergy. This will include subsidiaries like Ayala Aviation (a niche airline operator), HCX Technology Inc. (the holding firm for human resource outsourcing assets) and Ayala Group Club Inc.
Orbeta will likewise now be on top of programs like One Ayala, the Ayala Business Clubs, Acentives, Ayala Young Leaders and other corporate initiatives. —DORIS DUMLAO-ABADILLA
Passing the torch
Just a few weeks after successfully launching the marque’s latest and sexiest model, Lexus head honcho Daniel Isla has announced his retirement as president of Lexus Manila Inc. effective Dec. 31, 2016.
Having been behind the steering wheel of the Ty family-owned joint-venture company for the last eight years, Isla was responsible for transforming Lexus from a little known Japanese-made luxury car brand affordable only to the top segment of society into one that is better known among mainstream auto enthusiasts (but still only affordable to the upper echelons of society, and that’s how the brand wants it).
But it was great timing for the local Lexus distributorship since its ramped up local presence coincided with the rising buying power of Filipinos, many of whom were fortunate to move from middle to upper class during the last few years.
“Today, it gives me pride to see more and more vehicles on the road—a clear sign we have made a mark on the Philippine automotive luxury market,” he said in his farewell e-mail, where he also announced his successor at the helm of Lexus Manila, Raymond Rodriguez, who will assume the post come 2017.
So … fancy a Lexus nowadays? The most affordable model, a compact hatchback, will set you back at least P2.5 million. The top end SUV will burn a hole of almost P8 million in your wallet. But people are still buying, much to the surprise of early doubters of the brand.
Come 2017, Isla will probably be spending more time on the golf course. Or perhaps a new business undertaking? So no, this auto industry big hitter won’t be riding a horse into the sunset—he’ll probably be driving a Lexus. —DAXIM L. LUCAS
From Clark … to Japan
It’s a good time for that slice of the population living in northern Metro Manila and beyond.
The Department of Transportation, as part of its drive to move traffic to the underutilized Clark International Airport in Pampanga, looks bent on opening up flights between Clark and Japan next year.
Apparently, Transportation Secretary Arthur Tugade is in talks with flag carrier Philippine Airlines and Japan’s transport minister to get flights started between Clark and Okinawa.
We heard there isn’t a formal agreement yet. And while this is usually an announcement left for an airline to make, it does show the government’s strong support to develop Clark as a viable air gateway. It also came on the heels of PAL starting its Clark operations last week.
Launched were PAL’s Clark to Boracay Airport flights. These will be followed up with PAL-Clark Airport links to Cebu, Davao, Cagayan de Oro and Incheon, South Korea, in the early part of 2017.
Is the Land of the Rising Sun the next stop for Clark?
Abangan! —MIGUEL R. CAMUS
