July 19, 2018, 4:00 am
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New taxes

THE Senate is currently deliberating on the proposed tax reform program of the Duterte administration, and every member of the Senate has his or her take on the bill that would impact on petroleum products, sugary drinks, mass housing and other common consumer items.

From the House, Rep. Rodolfo Fariñas said it is unlikely that the P6 tax on diesel, kerosene, cooking gas and bunker fuel for electricity generation could be imposed in January, the target date of the administration.

He added that the new target would be in 2019 since senators did not make a firm commitment to approve the bill on the P6 levy and other items in the tax reform package this year.

The Senate leadership vowed during the July 26 consultation meeting that they would approve the tax bill by the first quarter of next year. 

It is easy to understand why this new tax measure has been undergoing serious scrutiny in the Upper Chamber. Several senators are planning to seek fresh terms in the mid-term elections of 2019, and any new tax measure that they pass will have a telling effect on how the masses of voters will regard them come election time.

In the words of Fariñas, the senators “cater to the whole voting population and are more sensitive to public pressure.”

Everybody remembers that in 2007, Sen. Ralph Recto lost his re-election bid due to strong backlash or voters’ revenge. With their long memory of anti-people sentiments, the voters remembered Recto as the principal author of the Expanded Value-Added Tax Bill in 2005.

The delay in the passage of the tax reform bill puts the Duterte administration in a quandary. This is because, as Albay Rep. Joey Salceda pointed out, the proposed P3.8-trillion national budget for 2018 already includes expected revenues from that bill. Salceda said some P134 billion in net gain is included, that is, total projected revenues of about P260 billion less losses from reduced income tax.

On top of this, President Duterte keeps on signing new laws without clear provisions on where to source the funds, such as the free tuition for college students in state colleges and universities.

The government will be hard put in finding money to make good its commitment on free tuition.

About the tweaking of income taxes, ordinary employees and workers are complaining. Even estimates by the Department of Finance say that “subsistence poor, poor, near poor, and informal workers” will lose much while professionals and corporate executives stand to gain by considerable amounts.

It is indeed hard to pass new taxes at a time when real incomes of the nation’s workers are not increasing to cope with the upward surge in prices.

Let us see how the Senate and forthcoming conference committee of Congress will try to balance the competing interests of taxpayers and government on the issue of taxes.
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