Monday, September 24, 2018
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Corporate Securities Info

Self-righteous stance on taxes

Finally, the first phase of the administration’s comprehensive tax reform program was approved on third and final reading by the House of Representatives.

The certification of President Duterte on the urgency of the measure made that possible.


But the President’s economic advisers are unhappy with the shape of the approved bill.

The amendments introduced in the bill reduced the expected revenue intake from P162 billion to P82 billion.

For Socioeconomic Planning Secretary Ernesto Pernia, the watering down of the bill submitted by the Department of Finance was a big letdown.

He said it should have been approved “as is” because the team that drafted it was interested in the country’s development and the improvement of our society.

To underscore this point, he stated that (referring to the team) “we have no personal agenda at all. And we are trained to do economic analysis, tax analysis. Hence, we know what is best and what is optimal.”

In effect, he was saying that the administration’s economic team should have the last word on the solution of the country’s financial problems and so those who are outside that circle have no right to question their judgment.

He virtually denigrated the integrity and intellectual capacity of the congressmen who pushed for the amendment of the administration bill.

And surprisingly, not a peep was heard from the subject of his tirade.

Pernia’s hubris brings to mind the political dictum “war is too important to be left to the generals.”


This maxim means that, although generals (or military men) may be adept in the ways of war, they should not be allowed to conduct it in the manner they please because civilians also suffer from the scourge of war.

Excuse me, sir, but nobody has a monopoly of ideas on how to effectively address the country’s financial problems.

While it is true that the administration’s economic managers have master’s or doctoral degrees from prestigious educational institutions here and abroad, that does not mean that they, alone, have the brain power or expertise that can improve the lot of our people.

Taxation or raising revenues is not just a matter of financial theories, assumptions, algorithms, case studies or historical analyses.

It is a gut issue, something that affects, directly and indirectly, the ordinary Filipino’s daily life and future.

What may look good on paper or in computer models will not necessarily work the same way on the ground, especially in the field of economics where many things beyond human control often happen.

Setting aside Pernia’s apparent low regard for the congressmen’s level of intelligence on economic and tax policies, it cannot be denied that they were duly elected to represent (and protect) the interests of their constituents.

Through the requests for assistance that they receive and the sentiments expressed to them by their constituents, the congressmen have a fair sense of the possible adverse effects of certain tax measures.

The congressmen should be given the benefit of the doubt when they question certain provisions of the administration’s revenue bills or otherwise put their two cents worth in them.

Although many of the congressmen do not have the same level of academic training as the members of the economic team, their views on issues that directly affect the people they represent deserve utmost respect and consideration from the executive department.

In a system of government that rests on the principle of check and balance, the contrary views of a co-equal branch of government should not be treated with contempt or disdain.

With the expected revenue intake from the administration’s revenue measure reduced, the challenge now to the economic team is to come up with innovative or out-of-the-box ideas to make up for the shortfall.

Since the members of the team are supposedly experts in economics and taxation, they should not find difficulty in finding a solution to the problem caused by intellectually-challenged congressmen.

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