‘Senate can’t pass Duterte’s tax package 100%’

The Senate Committee on Ways and Means aims to come up in September with its version of the tax reform package, which will be different from what President Duterte asked Congress last week to pass in full, Sen. Juan Edgardo Angara said yesterday.

Angara, chairman of the panel, issued the statement as the Senate leadership pushed for the convening of the Committee of the Whole – where all senators sit as members – to tackle the administration’s fiscal package called the Tax Reform for Acceleration and Inclusion (TRAIN).

Duterte, during his State of the Nation Address on July 24 asked the Senate to approve the fiscal package “in haste” and “in full” even as he singled out Angara as apparently being not keen on approving the measure that will help fund the administration’s massive infrastructure and social services programs.

The move to form a committee of the whole is expected to somehow take some heat off Angara, whom Duterte noted is seeking reelection in 2019.

Among the provisions opposed by senators are the increased taxes on diesel, sweetened beverages, and housing sectors that they said are inflationary and woud more than offset whatever gains workers would get from lower income taxes in TRAIN.

Angara sees areas of com- promise, including the staggered implementation of the P6 diesel tax, the restructuring of the sweet tax from liters to sugar content, among others.

“We will try to approve it (tax package) in full, but I think it’s impossible to make it 100 percent. Even the House of Representatives was not able to pass it 100 percent, but the President nevertheless still praised them,” Angara told dzBB.

He said the government must show resolve in addressing the various departments’

“absorptive capacity” or ability to spend all the money appropriated by Congress to them.

The senator said for 2016, some P500 billon in the national budget remained unspent.

“The best advertisement for the tax package is when the people can see where their money is going, like MRTs and roads,” Angara said.

He said that during one of the hearings of his committee, officials from the Department of Social Welfare and Development opposed the proposed fuel tax.

Many senators also support the idea of staggering the imposition of the diesel tax per liter into P1 on the first year, P2 on the second year and P3 on the third year, he said.

Angara said restructuring the tax on sugar-sweetened beverages based on sugar content instead of per liter would incentivize manufacturers to lessen sweeteners in their drinks.

Angara said he was not thinking of his reelection bid in deliberating on the tax measure to make sure the bill would be progressive, and pro-poor.

Sen. Joseph Victor Ejercito also continues to support Duterte’s various programs such as those in infrastructure development, but he cannot fully back the tax package.

“I cannot in my conscience support the comprehensive tax reform program being pushed by the Department of Finance as I see its current form as pro-government, but anti-consumers,” Ejercito said.

Senate President Pro Tempore Ralph Recto said senators would cross party lines in asking agencies during the 2018 national budget hearings if they are on track in spending their current year allocations to find out if underspending still plagues budget utilization as it had in the past administration.

Officials of the Duterte administration have been quoted as saying that the Aquino administration failed to spend or delayed the spending of an estimated P1 trillion in appropriations, a charge which has been denied by the previous set of economic managers.

“Now that the shoe is on the other foot, it is time to ask this question: Have you solved the problem you have accused your predecessors of doing?” Recto said.

“It’s a valid question because budget hearings are sessions where they’ll be asking for fund replenishment. So before we replenish, we should ask if they’ve been prompt in disbursing,” he said.

Recto said he was given a preliminary estimate that unreleased appropriations reached P185.8 billion in 2016, on top of unobligated allotments of P410.8 billion.