Tax deformed package
Lobbyists against the long overdue “tax reform package” of the motorbiking Duterte Harley earlier scored a victory in the House of Representatives.
In the Senate, however, they clearly trounced the tough talking President.
From what I heard, the administration now resorts to prayers, seemingly hoping for a miracle in the bicameral committee, if and when it finally tries to reconcile the two deformed versions of the package.
The economic team was supposedly still “optimistic” the House version would prevail in the bicameral committee.
Down here in my barangay, another word for “optimistic” is “wistful.”
To begin with, wrapping up the reform package did not seem to be an urgent task for the committee. It already deferred its meeting to the middle of November. Its priority was, well, its members had to take the much-needed congressional break of one month.
Anyway, the package contains this item called “funding,” which Duterte Harley happens to need—and badly so—for his banner program, the ambitious P8-trillion infrastructure blast dubbed as “Build, Build, Build.”
Like it or not, that is the centerpiece program of this administration—not the killings in the controversial drug war—and it needs Congress to raise the money for it, unfortunately.
One portion in the Duterte Harley tax reform breezed through Congress: the huge cuts in income taxes.
The real problem arose in the new tax measures that, based on figures from the Department of Finance, would yield from 2018 to 2022 about P1.3 trillion.
It was bad enough that the House version already reduced it by P200 billion.
By the way, the House version basically followed the DOF proposals for new taxes, except the higher tax rates for—guess what—expensive cars.
Word went around that the House version succumbed to the strong lobby from car companies, which were mostly foreign-owned sales outfits, although they loved to misrepresent themselves as a “local industry.”
In the Senate version, however, it was the complete sellout to the lobbyist from the car companies and the several industries in manufacture of sugared drinks.
According to official estimates of the administration, the Senate’s watered down version would yield in the next four years—get ready for this—a whopping amazing mind-boggling P630 billion.
That would only be about 50 percent of what Duterte Harley asked for.
Duterte Harley supposedly had majority of the Senate as political allies.
Actually, his economic team earlier had bad scuffles in media with the “allies” over the package, as the “allies” insisted they were the ones elected by the people to decide on taxes.
Meaning, not the Cabinet men, and not even Duterte Harley.
Still, the administration begged the senators to trust the various studies supporting the package.
In fact, most of the former finance secretaries trooped to the Senate to convince our beloved senators, please, not to mangle the measures.
Except former Finance Secretary Cesar Purisima, who served under the Aquino (Part II) administration, who just threw away the tax reform package without much ado.
The senators said that they just had to change the package for our own sake, or as opposition Sen. Benigno Aquino IV (vice chair of the ways and means committee) put it, the senators “owe it to the people.”
The senators for instance claimed the imposition of tax on diesel would only raise the prices of everything—eventually—a claim that was not actually supported by facts.
Guess what—the Senate version adopted the diesel tax of P6 per liter proposed by the administration, and it just delayed its imposition by one year.
What was the reason for the delay? Well, for the sake of the people! Supposedly it would give us time to adjust to the new tax.
In other words, if the diesel tax would kill us, the Senate just made sure that we would be prepared enough to die.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.