By Jess Diaz and Paolo Romero (The Philippine Star) - MANILA, Philippines - Imposing new taxes is out of the question for the House of Representatives, but more reforms are being readied to help plug tax leakages as well as ensure adequate revenues for the government, Speaker Feliciano Belmonte Jr. said yesterday.
“We must drastically improve tax administration and plug leakages in our tax system if we are to increase revenue and adequately finance needed services and infrastructure, while staying true to our promise against the imposition of new taxes,” Belmonte said in a speech during the opening of the second regular session of the 15th Congress.
“Towards this end, we must prioritize the rationalization of our fiscal incentives and remove unwarranted benefits which erode our tax base but fail to increase the attractiveness of our country as an investment destination,” he said.
He said the House would also review “existing (tax) exemptions, including those on VAT (value added tax), which result in leakages and render cumbersome tax administration.”
He revealed plans to restructure excise taxes on the so-called “sin” products like cigarettes and liquor.
“The prevailing multi-tax rate classification of cigarette and alcohol products and the pegging of sin taxes to 1996 price levels have convoluted the tax system and shrunk the tax base, dampening the government’s revenue efforts and essentially depriving the public of resources which could have been used to fund the most basic of services,” he said.
“Restructuring sin taxes – in lieu of imposing new ones – will generate additional revenues which can fund the requirements of universal health care,” he stressed.
The House has avoided approving tax measures, although its ways and means committee has endorsed several tax and fiscal reform-related bills.
These bills include one that seeks to rationalize fiscal incentives, authored by Belmonte himself, and another that proposes to restructure and update the 1996 price level-based excise tax rates on tobacco and alcohol products.
In his remarks, Belmonte said the House will continue to pass measures that would keep the economy on the growth path.
“We should strive to keep the macro-economy stable and maintain a low inflation regime by addressing key fiscal issues. Towards these ends, we must act on the Fiscal Responsibility Act, amendments to the Tariff and Customs Code, and reform of the land valuation system,” he said.
The other measures being strongly considered by the House, according to Belmonte, are the Competition and Anti-trust Law, Pocket Open Skies Act, National Land Use Act, Cybercrime Prevention Act, amendments to the build-operate-transfer law and the Electric Power Industry Reform Act of 2001, Water Resources Bill, National Defense Act, and the bill defining the country’s sea lanes.
“Ending corruption requires fine-tuning regulations to plug loopholes which the unscrupulous exploit in siphoning public monies into private pockets, engendering a culture of transparency, and marshaling private support in the fight against the corrupt,” Belmonte said.
“To this end, we must prioritize amendments to the Government Procurement Reform Act and to the Anti-Money Laundering Law, the Freedom of Information Bill, and the Whistleblowers and Witness Protection and Security Acts,” he said. He vowed continuing support for the administration’s conditional cash transfer program, which has “helped salvage countless families from the dehumanization of hunger, and more importantly, generated hope for the better for those who have gotten used to getting so little.”
He told his colleagues that their “remarkable performance in our first regular session gave the people a glimpse of our capacity for great achievement.”
“We proved that with hard work, we can rise above limitations in time; with ingenuity, we can plug the constraints in resources; with our noble intentions, we can close the divide of narrow partisanship,” he said.
“We proved against great odds and amidst our differences in opinions, beliefs and political inclinations that a principled engagement on even the most controversial and difficult questions is not only possible but the most viable option for the reform agenda to push through,” he said.
Attendance at the start of the second regular congressional session was the highest at 261 of the 285 House members.
It was the highest opening-session attendance ever recorded in the history of the House, Belmonte said, quoting secretary-general Marilyn Yap.
Reforms on track
Belmonte also said that while reforms under the Aquino administration have taken hold, they need the full support of the people to gain momentum.
In his speech, Belmonte also credited House members for ensuring the implementation of socio-economic and governance reforms.
“We return to this chamber at the midpoint of our term as our people’s representatives. We do so with pride in our accomplishment so far, aware of the great challenges that lie ahead, and with even more confidence in our dedication and collective strength,” Belmonte said.
“We start our Second Regular Session today fully aware that the midpoint of the struggle for reform defines its final outcome. It is at this juncture when the euphoria of every beginning gives way to the burden of moving forward, when our momentum might falter. It is at this juncture when we are called all the more to statesmanship, focus and hard work to steer our reform program to its fruition,” he said.
“The fruits of our reform efforts are starting to show. A declining trend in self-rated poverty has emerged – a significant turnabout from years of worsening poverty despite an expanding economy,” he said.
He said the country’s credit ratings have improved, and investor and business confidence have remained steadily optimistic.
He also cited statistics that indicated a marked growth in employment, or a net gain of more than 1.4 million employed persons.
“These turnabouts did not happen by miracle or chance. They were the result of deliberate decisions and policies which this chamber and each of its members helped will into reality,” Belmonte said.
He said the decision of the House to keep the conditional cash transfer program from being reduced, “and our will to shepherd it despite criticism and widespread pessimism, proved correct.”
He said the chamber’s swift passage of the GOCC Governance Act has arrested the pillage of public coffers. “Along with the other critical industry measures we passed – such as the Data Privacy Act and the lifting of the night work prohibition on women – we communicated our firm resolve to instill fiscal discipline and further strengthen our economic fundamentals for sustained growth,” he said.
“Our actions not only earned public approval but regained for this institution the trust and confidence of our people. This trust we will build on,” Belmonte said.
