Chiz slams Congress for kowtowing to Aquino

Sen. Francis “Chiz” Escudero has assailed fellow legislators for kowtowing to Malacañang in the performance of their mandated task of legislation. 

The senator, former chairman of the Senate finance committee, fumed over reports quoting Budget Secretary Florencio “Butch” Abad as having said Senate President Franklin Drilon and Speaker Feliciano Belmonte Jr. met with Mr. Aquino early last week and it was agreed the President would consult with Finance Secretary Cesar Purisima and Internal Revenue Commissioner Kim Henares this week on the tax-cut bills pending in Congress.

“Why does Congress have to ask permission from the Executive department before doing its job? If both the Senate President and the Speaker are in favor of tax relief, then we should pass the measure. Whatever happened to the separation of powers and independence of the three co-equal branches of government?” Escudero asked.

Congress can legislate a law lowering personal and income taxes as part of its mandate, and with the right political will and determination, the passage of the tax-reform bill is guaranteed, “even without the consent of the Executive.” Escudero said. “All Congress needs to do is to assert its power to legislate on taxation.”

During his first term as senator, Escudero sponsored a measure exempting minimum-wage earners in the private and public sectors from income tax, which later became Republic Act No. 9504. The law covers the basic pay, holiday pay, overtime pay, night-shift differential and hazard pay of minimum-wage earners.

The senator earlier urged Malacañang to certify as urgent pending proposals to reduce income-tax rates, particularly the personal in come tax, which, at 32 percent is the highest in Southeast Asia.

He said lowering personal income taxes would help the country’s workforce to keep up with the rising costs of essential goods and services.

Despite reports that Mr. Aquino appears to have softened his stand against the tax cuts, Abad refused to commit himself to the measures pending in Congress.

“The government is collecting taxes better and managing (our) liabilities better and that’s why fixed-earning tax payers should be given a sort of prize for their diligence,” Abad said. “But adjusting the tax brackets needs to be comprehensive and that’s why the President has asked the Department of Finance (DoF) to review the matter.” Abad said the tax cuts would result in a P29-billion government loss from its annual tax collections.

Congress itself is divided on the issue. Many senators do not support the House initiatives and are saying that despite the Palace’s assurances, the tax-cut bills face an Aquino veto, if passed.

Even the Liberal Party’s presidential candidate Manuel “Mar” Roxas is opposed to the tax cuts. He has told the proponents to identify government programs and services that would have to be eliminated if the tax-reform measures would be put in place.

Meanwhile, Bayan Muna Partylist Rep. Neri Colmenares said an anticipated decrease in tax collections should not be an excuse to reject tax reforms. There are sources of funds bigger than the P29-billion or P30-billion projected revenue loss, he said. He cited, for instance, the budget savings of the Aquino administration in the last five years that averaged about P100 billion a year. He also noted that the government underspent an estimated P40 billion per year. “Why can’t they get funds from Malampaya that actually paid the P53 billion worth of tax of oil firms Shell and Caltex?” Colmenares also said. It is about time the government reduced tax rates, as they are “thoroughly outdated,” Colmenares said. He noted how a taxpayer with an income of P500,000 a year is still taxed by 32 percent, according to 1987 standards, although it is now 2015. “Don’t tell me that the value (of money) we had in 1987 is still the same nearly 20 years after. It’s as if you’re taxing an individual earning P500,000 (annually) the same way you collect taxes from a billionaire,” Colmenares said. Colmenares also took a jab at the President for intruding into the legislature’s independence. “As far as I’m concerned, most of our colleagues, Liberal Party members or not, are positive on the tax reform movement.” he said. Former National Treasurer Leonor Briones, meanwhile, offered another take on the issue. She said lowering income taxes does not guarantee the constitutional mandate of progressive taxation, but would rather “continue the incumbent regressive tax system in the Philippines.” The argument that the government can make use of its savings as a remedy for revenue shortage is more of an issue of the government’s “inefficiency in implementation” rather than a tax issue.

“Lowering income taxes is truly appealing to religious tax payers but it is not the complete picture because the DoF and the Bureau of Internal Revenue (BIR) would definitely find ways to make certain remedies for this regressive tax relief,” Briones said. “If the tax reform for income-tax payers is passed, the obvious thing the government would do is to raise the VAT (value added tax). Since none of us is exempted from paying the VAT, it would be a burden to everybody, especially the non-tax paying folks who are the actual majority in our country.”