AT SENATE: Tax reform package faces rough sailing

Wednesday, July 26, 2017

MANILA – The approval of tax reform package in full, including taxes on sugar-sweetened beverages, as endorsed by President Rodrigo Duterte, may face rough sailing in the Senate, although majority of its members are his allies.

Senators Juan Miguel Zubiri and JV Ejercito, staunch supporters of the sugar industry, yesterday said that they will push for its amendments.

Zubiri said that he will not only push for the lowering of sugar taxes, but also for amendments ofthe tax reform bill.

The bill imposes a P10 excise tax on every liter of sugar-sweetened beverages containing locally produced sugar, while others will be taxed P20 per liter.

Zubiri said he will recommend that taxing of sugar-sweetened beverages should be consumption-based.

Ejercito, on the other hand, said, said that while he supports President Duterte's infrastructure development, and has committed to spend P3 trillion for it, “I cannot, in conscience,support the comprehensive tax reform package, being pushed by the Department of Finance, although the intention was good.”

They have to get the revenues somewhere else?excise tax or value-added tax.

The House of Representatives passed the tax reform bill in May, as a boost to the President's plan to build P8 trillion in new infrastructure.

In his second State of the Nation Address, Duterte called on the Senate to support his tax reform bill in full, adding that “These reforms are designed to be pro-poor, especially when the people understand how the revenue will be spent,"

Rep. Alfredo Benitez (Neg. Occ., 3 rd District), who authored the Sugar Industry Development Act, co-authored also by Senators Cynthia Villar, Zubiri and Ejercito, said he hopes that sugar taxes will be pushed in the Senate.

“We were lobbying for much less tax rates.”, Benitez said, adding that if the Senate will reduce it, it is more than welcome.

Ejercito expressed his apprehensions over the excise tax on petroleum, which, he said, will have an inflationary effect. If prices of petroleum increase, prices of basic commodities will also shoot up.

“Having been a co-author of SIDA, which is designed to stimulate the sugar industry, it will be inconsistent on my part to support the tax reform bill,” he said.

Putting Value Added Tax on housing, including socialized housing, will also increase the back log of housing needs, as developers may not enter socialized housing projects, as the margin of income for them is getting smaller, Ejercito said.

Zubiri and Ejercito said many Senate members will not agree to pass it in “toto”. “Many of us agree to amend it so that it will be more palatable to the people.”

“All of us are affected by the fact that it will be passed in the Senate, but we will haveto amend certain provisions,”Zubiri told the visiting journalists from Negros, who attended the Senate session yesterday.

Members of the Senate are scheduled to have another hearing today on the tax reform bill, which is being scrutinizedby the committee of Senator Sonny Angara.* GPB