More flawed than the House TRAIN

In my column “Saving TRAIN” (6/17/17), I ended with this statement: “Let us see how the Senate stands up to them.”  By “them” I was referring to the powerful tobacco and mining lobbies that are fighting tooth and nail to exclude sin and mining tax reforms from the TRAIN (Tax Reform for Acceleration and Inclusion), which is now being considered in the Senate.

Well, Reader, given what has been presented by the Senate committee on ways and means headed by Sen. Sonny Angara, I can give you an initial answer: The Senate not only did not stand up to them, it also became their doormat. The voices of the health coalition made up of at least 60 organizations and led by former health secretaries, medical associations, health workers, and NGOs were drowned out by the clink of contributions of the tobacco and mining lobbies.

Realpolitik at work: Who wants to testify before the committee when what is really important is to dangle goodies like campaign and other contributions behind the scene? The health coalition didn’t have that kind of ammunition and thought logic and empirical evidence would suffice.

Realpolitik at work: I am told that Sonny Angara cannot act motu proprio (on his own); he must wait for another senator to endorse or sponsor a tax measure that is not in the House bill. Well, Reader, not a single member of the Senate did that. No one wanted to stand up to Big Tobacco and Big Mining. But the Senate bill includes (which the House bill does not) a cosmetic surgery tax and a coal tax, not to mention the taxes on capital gains and dividends as well as property valuation and exemptions for special economic zones, which were supposed to be elements of future tax packages. If those can be included now—some of them with no thorough hearings—why not the sin tax and the mining tax? It seems these others had no lack of Senate sponsors.

Realpolitik at work: Senator Angara also points to the Department of Finance, which is not pushing the tobacco and mining measures allegedly because it needs more time to determine their fiscal impact.

Good grief, Senator. With regard to smoking, there are literally tons of evidence as to the ill effects of smoking on health, including what it costs the Filipino people yearly and who are affected (mostly the poor), not to mention worldwide evidence that sin taxes are one of the most dependable of revenue-raisers, and black-and-white evidence that our sin taxes are among the smallest in the region and the world. What else do you need? I guess there is no way you can wake up a person who is pretending to be asleep.

With regard to mining, way back (three years ago) the Mining Industry Consultative Council endorsed a bill to the previous Congress which would, among other things, correct the very evident wrong that the government is getting next to nothing from the mining industry for its ownership of the minerals.

But here is more bad news, Reader: Not only tobacco and mining were at work, it seems the automotive industry also got into the picture again. Not content with reducing the excise tax on automobiles in the House, it apparently got involved with the excise tax on petroleum, and convinced Senator Angara to reduce it from P3 to P1.75 (fuel excise taxes have not been changed for over 20 years).

Is Senator Angara aware that it is the revenue from these taxes that will fund the cash transfers to the lower-income groups—the cash transfers that will compensate for their being dejado in the TRAIN? What’s more, these fuel excises are going to be suspended if crude oil prices exceed $80 per barrel. Which means, it would seem, that Angara is not really interested in the problems of the poor.

Senator Angara and other members of the Senate, the bill you have before you is even more flawed than the TRAIN the House has passed. The net effect is that it seems you have addressed the needs of the rich (e.g., put a cap on income tax rates, reduced automotive and fuel excises), and are cavalier about the needs of the poor and the marginally nonpoor. Once again, screw the poor.