Purisima, Henares deny favoring sin tax bill version of House

BIR Commissioner Kim Jacinto-Henares. INQUIRER FILE PHOTO

MANILA, Philippines — Finance Secretary Cesar Purisima and Bureau of Internal Revenue Commissioner Kim Henares denied on Wednesday that they favored the House of Representatives’ version of the sin tax bill that imposed much less taxes on beer and alcohol, as alleged by Sen. Ralph Recto.

Purisima said the Aquino administration has and would always prefer a tax version that would generate P60 billion in tax collections every year but it was the House that chose the formula and cut the revenue target by almost half.

“I don’t think that’s believable,” said Purisima, referring to Recto’s allegation. “Our original bill is (for the generation of) P60 billion (in tax collections), but this goes through a process, and in Congress they only agreed to P33 billion with a big reduction on alcohol,” the finance secretary explained.

“It’s still in the Senate and we will continue to work with the Senate on this. We will still push for P60 billion and we will try to get the best deal that they can give us, hopefully an amount that would allow us to fund public health care and discourage the consumption of sin products,” Purisima said.

Should there be a compromise, Purisima said the Aquino administration would agree to a formula that would lower the tax target to P40 billion.  “If there is a minimum that would enable us to accomplish the objectives of the (administration) bill, that would be P40 billion. Of course, the bigger the better,” he said.

The finance chief said he was not interested in getting dragged into a word war with Recto over sin taxes.  “We also do not support name calling. This is not a productive way of discussing very important bills, especially taxes.”

Henares, meanwhile, said it was the House of Representatives that crafted a tax formula for cigarettes and alcohol that significantly cut the tax collection target from P60 billion a year.

“The Executive has consistently been pushing for reforms in the excise tax regime of both alcohol and tobacco. We submitted our proposal to the House, which provided for incremental revenues of P60 billion — P30 billion each for tobacco and alcohol. The House made amendments to the version advocated by the Executive especially on the portions related to alcohol. We are not members of the House; our role is to provide technical support and assistance to our legislative champions,” Henares said in explaining how the bill transformed in the House.

The BIR chief insisted they worked hard in trying to convince the House of Representatives to retain the formula that would rake in P60 billion in tax collections.  “During hearings at the Senate we have always pushed for improvements in the provisions of the House version related to alcohol. As transcripts from the Senate hearings would attest, we have urged the Senate to increase revenues collected from alcohol and at the same time maintain the revenues from tobacco provided for in the House version so that the incremental increase in revenues would be greater than the P30 billion to be raised by the House version and closer to the P60 billion advocated by the DOF.

“DOF will always be at the forefront of measures to increase revenues to fund government’s priorities,” she said.