By Butch Fernandez & Jovee Marie N. dela Cruz
Malacañang, taking the cue from Finance Secretary Cesar V. Purisima, is unlikely to endorse the passage in Congress of a long-pending bill mandating downward adjustments in individual and corporate income-tax rates.
Secretary Edwin Lacierda, President Aquino’s chief spokesman, gave an indication of Malacañang’s position when asked if the Palace would support the awaited approval of the bill being pushed by Sen. Francis G. Escudero with the backing of the House Ways and Means Committee.
Replying through a text message, Lacierda quoted Purisima’s stand that the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.”
Instead, Lacierda said the finance secretary “urged Congress to approach fiscal reform from a holistic standpoint, with the goal of making the structure more buoyant, equitable, progressive and competitive.”
“This will allow us to continue increasing investments in our people and infrastructure, which is crucial to our competitiveness and ability to attract investments and create job opportunities,” Purisima added.
The Palace earlier indicated that the administration is not closing the door on the proposal to lower income-tax rates.
However, Coloma suggested that proponents of the measure in the Senate and the House should first “identify new and additional sources of tax revenues” to offset the reductions.
Escudero, who coauthored Senate Bill 716 amending the National Internal Revenue Code, aims to adjust existing net taxable income levels from 32 percent to 25 percent, as well as nominal tax rates by adopting adjustments in individual income-tax rates to reflect the erosion of purchasing power caused by inflation.
Escudero suggested that President Aquino could either certify the urgency of passing the bill lowering income-tax rates, or submit a Palace-preferred version of the measure that Congress could adopt for early approval.
The Senate, however, must await passage of the counterpart bill in the House, it being a revenue-related measure that, under the rules, must emanate from the House of Representatives before Senators can approve it.
Coloma, however, also cited Purisima’s preference for a “holistic review” of the tax structure to avert risking the country’s fiscal situation, with estimated revenue losses amounting to P30 billion a year if the proposal to lower income-tax rates is adopted by the government.
Congress priority
The leadership of the 16th Congress on Thursday agreed to prioritize in the next five weeks eight important bills.
House Speaker Feliciano Belmonte Jr. and Senate President Franklin M. Drilon, after the Congress leaders’ monthly meeting, said both chambers are eyeing to pass in the next five weeks—or before their October 10 break—the proposed 2016 General Appropriations Act (GAA), proposed Basic Law on Bangsamoro Autonomous Region (BLBar), proposed Tax Incentives Management and Transparency Act (Timta), the Sangguniang Kabataan (SK) reform law, proposed creation of the Department of Information and Communications Technology (DICT), amendments to the build-operate-transfer (BOT) Law, amendments to the Customs and Tariff Modernization Act and a bill amending the Revised Penal Code (RPC) insofar as the monetary values are concerned.
Not included in their priorities in the next five weeks are the proposed Freedom of Information Act and anti-dynasty bill.
Belmonte also expressed confidence that the lower chamber will muster a quorum in the next five weeks to prioritize these bills.
Drilon said that the Senate will exert extra effort to pass the proposed BLBar.
“I have discussed this [BLBar] with the majority of the senators [and we can pass it]. We will exert every effort to pass it. Our objective is to pass this before we go on a break,” Drilon said.
Present during the monthly meeting were Belmonte, Drilion, House Committee on Ways and Means Chairman and Liberal Party Rep. Romero S. Quimbo of Marikina, House Majority Leader and Mandaluyong Rep. Neptali Gonzales II, Minority Floor Leader Rep. Ronaldo Zamora and Sen. Ralph G. Recto.
The proposed 2016 GAA and the BLBar are under committee deliberations and plenary deliberations, respectively, at the both chambers of Congress. The BLBar aims to create the new Bangsamoro juridical entity replacing the Autonomous Region in Muslim Mindanao.
The Timta, meanwhile, seeks to promote transparency and accountability in the grant and administration of tax incentives to business entities, private individuals and corporations. The congressional bicameral committee will start to reconcile the two chambers’ different versions of the Timta this month.
The Senate and the House have also reached a consensus to postpone the SK elections from the scheduled February 21, 2015, to October 31, 2016. Both chambers already approved their versions of the proposal to create the DICT.
The proposed amendments to the BOT law are currently pending in the Senate, while the House Committee on Public Works and Highways has approved the proposal in June.
The measure aims to strengthen the basic legal framework in undertaking public-private partnership projects. Meanwhile, the proposed amendments to the Customs Modernization and Tariff Act are already at the period of interpellations in the House plenary, but are still under the committee deliberations in the Senate.
Also, the measure “adjusting the amount involved, value of property or damage on which a penalty is based and the fines under Act 3815, as amended, otherwise known as the RPC” is pending at the committee level of the both houses.
The measure will amend Article 26 of the RPC and most of the threshold figures in Book 2 based on the proportionality of the crime to the prescribed penalty in relation to present values.
Five session days
Meanwhile, Gonzales said the lower chamber will conduct a Monday-to-Friday session schedule to discuss important measures.
Like their regular schedule from Monday to Wednesday, the majority leader said sessions for Thursdays and Fridays would start at 4 p.m.
Gonzales said the last two weeks of session—or from September 28 to October 9—will be allotted to pass the 2016 budget, while the first three weeks—or from September 7 to 25—will be for pending priority bills, including the BLBar.
“We agreed to hold a weekly five-session day in the next five weeks starting on Monday [September 7]. This is to ensure the passage of priority bills, including the BLBar. The last two weeks before adjournment are exclusively for national budget’s approval,” Gonzales said.