Sister acts on House tax bills

The swift approval by the House of Representatives of the proposed increases in the tax rates on so-called “sin” products – cigarettes and alcoholic drinks – could be considered a major achievement of the 18th Congress under the leadership of Speaker Alan Peter Cayetano. On a vote of 184 affirmative, two negative and one abstention, House Bill (HB) 1026 – Package 2 Plus B of the Comprehensive Tax Reform Program (CTRP) was approved on second and third reading last Tuesday.

The Package 2 Plus B refers to proposed imposition of “sin” tax on so-called “alternative” tobacco products like electronic cigarettes and vapes which were not previously covered by recently approved Tobacco Excise Tax Law.

HB 1026 is authored and sponsored into law at the House floor deliberations by Albay Rep. Joey Salceda as chairman of the House ways and means committee. Speaker Cayetano underscored the need to prioritize the passage into law of several tax bills to raise needed revenues in support of the proposed P4.1 trillion national budget for next year as submitted to the 18th Congress last Tuesday. 

Invoking Section 48 of the House Rules, Salceda succeeded in fast-tracking the approval of HB 1026. Under this rule, bills that were previously approved at the Lower House but got stuck at the Senate during the past 17th Congress would not have to go through repeated public hearings and be submitted by the House panel immediately for plenary deliberations and approval.

While it did not take long to approve this tax measure, the Speaker’s Ate Pia is not all happy on the House-approved version of this administration’s priority certified bill that now goes automatically to the Senate for its counterpart version.

The Speaker’s “Ate Pia,” of course, is Senator Pia Cayetano.

She is Salceda’s counterpart at the Senate committee on ways and means. And don’t forget, the Speaker’s wife, incumbent Taguig City Congressman Lani Cayetano. But as the chairperson of this Senate panel, Sen. Pia would be the one to carry the ball on HB 1026 and several other administration tax bills endorsed for approval into law by President Rodrigo Duterte.

Attending the Kapihan sa Manila Bay breakfast news forum last Wednesday, Sen. Pia disclosed that she found the HB 1026 version cut by half the government’s projected P32.94 billion of additional revenues from Package 2 Plus B. This is the total amount that could be collected from higher  “sin” tax rates under the Department of Finance (DOF) version of Package 2 Plus B on “alternative” tobacco products like electronic cigarettes and vapes as well as wines, beer, and other alcoholic products.

But the proposed DOF tax rates on these “sin” products were reduced in HB 1026. While the House was taking up in plenary the approval of HB 1026, Sen. Pia was conducting the first public hearing on the DOF version of the same bill last Tuesday.

Cayetano reaffirmed her commitment to push for the approval of the DOF version that is being earmarked as primary of the funding gap for the Universal Health Care (UHC) Law that she voted for when she was then Congresswoman for Taguig City during the previous 17th Congress. “I have an open mind to go towards the version of the DOF because I am with the administration,” she declared. “Our UHC program is moving forward. But I really want to see it further funded. That’s where my passion is coming from to make these [tax reforms] happen,” she cited.

She recalled during her first term as Senator – her brother Alan was also then Taguig City Congressman – she likewise supported the tax reform bills that were in compliance with impositions by international institutions. Though she did not mention it, she apparently referred to the World Bank (WB) and the International Monetary Fund (IMF) prescriptions to improve the fiscal position of the Philippines during the difficult global economic period at that time.

“We’re passing taxation measures again, not because it is being imposed upon us by any international body. We’re in a position now where we are cleaning up our [own] house, not because we have to but because it’s the best thing to do,” Cayetano pointed out.

Being a former private corporate lawyer, Sen. Pia shared the concerns of the affected sectors of any tax increases that would affect the financial picture of their operations. She promised to give equal airtime to cigarette and alcohol product manufacturers in the succeeding Senate hearings scheduled in the next few weeks.

Malacañang though was least perturbed by the obviously watered down version of the House-approved CTRP-2. Cabinet Secretary Karlo Nograles who joined in our Kapihan sa Manila Bay cited HB 1026 will still be subject anyway to the bicameral conference committee (bicam) to consolidate it with the Senate-approved version.

At the bicam, select members from the Senate and the House sit together and meet in closed-door sessions. It is the so-called “third” Congress. This is because the bicam is where the final consolidated version of any legislation is approved and submitted for concurrence in the plenary in both chambers.

Being a former lawmaker himself, Nograles counts upon this legislative process that sorts out and reconciles the differing versions of the bills at the bicam. Nograles served as Congressman from Davao City before he joined the Duterte Cabinet that cut short his third and last term during the 17th Congress.

Moreover, Nograles disclosed, HB 1026 and the other CTRP bills could also be threshed out in the forthcoming meeting of the Legislative-Executive Development Advisory Council (LEDAC). According to Nograles, no less than President Duterte will preside this big meeting of the LEDAC at Malacañang probably early next month after the latter’s scheduled official trip to China.

Sen. Pia will also shepherd the other DOF-pushed tax bills under CTRP, namely, the proposed Corporate Income Tax and Incentive Reform Act (CITIRA); the proposed National Property Valuation Act; and the proposed Passive Income and Financial Intermediary Act (PIFITA). And this is not because she is the Speaker’s sister.