Taxed to death

Sen. Juan Edgardo “Sonny” Angara stood much taller for taking to the highest level his advocacy to cut the tax burden of all fixed income earners. Angara was unperturbed over the public rejection by President Benigno “Noy” Aquino III on the proposed income tax bill now being deliberated in the 16th Congress.

In repeatedly rejecting the income tax cut bill, President Aquino echoed the objections raised by his fiscal advisers led by Department of Finance (DOF) Secretary Cesar Purisima and supported by deputies, namely, Bureau of Internal Revenue (BIR) commissioner Kim Henares and Bureau of Customs (BOC) commissioner Alberto Lina.

The Aquino fiscal advisers objected to this proposed income tax reduction bill, citing an estimated P30 billion in potential revenue loss for the government.

But how come when they came last Tuesday to the Senate public hearing to ask approval for their proposed budget for 2016, the DOF-BIR-BOC sought an increase of more than P34 billion in appropriations for their agencies?

What was more mind-boggling to Angara was the admission during the Senate hearing by National Treasurer Roberto Tan that the government earned as much as P64 billion premium out of the ten projects bidded out the past two years under the Aquino administration’s Public-Private Partnership (PPP).

“Thus, more than double to offset income tax reform for millions of Filipinos…Thus, cash or extra funds the government can use, why not for the millions (of pesos) over collected taxes over the years?” Angara fumed.

Angara found further to his dismay that the proposed budget next year of the DOF and its attached agencies would increase by more than 224.86%. The existing budget this year of the DOF-BIR-BOC amounts to P15.497 billion. They wanted to increase this to P50.344 billion for 2016.

In our Kapihan sa Manila Bay at Luneta Hotel last Wednesday, Angara presented to us a breakdown of the proposed 2016 budget of the DOF which glaringly showed much of the increase of proposed expenditures of these tax collecting agencies are for the construction of new buildings.

For the BIR budget for next year alone, P3.126 billion is allocated for new buildings of “satellite offices for the commissioners” in the regions.

For the BOC, they sought P100 million for the construction of new building at the Port of Cebu.

At the Senate hearing, Purisima explained the jump in the DOF’s budget for next year is primarily for capital outlay, specifically for the construction of a new building that would house its offices and those of its attached agency, the Bureau of Treasury (BTr). A sum of P1.8 billion of the proposed budget of the DOF would go to the construction of the building, which Purisima cited is just an initial amount needed for the project.

This is because under the proposed Manila Heritage Urban Renewal Project, the current BTr building (called Ayuntamiento in Intramuros, Manila) will be converted into a hotel.

The bulk though of the proposed budget for them next year is for “budgetary support” (euphemism for subsidy) that the DOF wants to give to two attached state-owned corporations. As recommended, the Land Bank of the Philippines would get P20 billion while the Development Bank of the Philippines will receive P10 billion.

Purisima explained to the senators the P30 billion for the two state-run banks is meant to improve their capital adequacy ratio as required by the Bangko Sentral ng Pilipinas. This is in compliance with the Basel III or the Third Basel Accord for Banks, he pointed out, meant to make the country’s banking system safer.

It was with relief to hear at the Kapihan sa Manila Bay breakfast forum from Angara that he would not be daunted by the public rejection by the President of his proposed bill seeking to reduce the existing tax rates for individual and corporate income taxes. His advocacy got the full support of the Joint Foreign Chambers comprised of multinational companies operating here in our country and the Trade Union Congress of the Philippines.

For ordinary salary and wage earners like us, any amount of reduced income tax take from our monthly or daily pay slips would help us stretch our purchasing power.

As chairman of the Senate ways and means committee and principal author of the proposed tax cut relief bill, Angara considers it a challenge to wage this battle at a time the country is reported to enjoy robust economic growth.

He renewed his call to President Aquino that it is the right time to give back to the people these purported economic gains. And the direct way to enjoy the fruits of this growth being bandied about by the Aquino administration is easing the tax burden of the people who are paying diligently their income taxes, especially us fixed income earners.

At the breakfast forum, Angara declared his determination to pursue tax reform through this proposed legislation to institute more equitable taxes in our country. A known ally of President Aquino, Angara ran and won as administration-backed senatorial bet from the Laban ng Demokratikong Pilipino (LDP) in the last May 2013 elections.

He remains hopeful though that President Aquino may still relent to eventually support the proposed income tax cuts bill. Angara wished the Chief Executive is given a more accurate and clearer information on this tax reform measure.

Speaking like an old hand in politics, Angara conceded political alliances in our country shift at every change of administration. He has seen this for himself in the past 12 years he has been in politics following the footsteps of his namesake father, former Senator Edgardo Angara.

The young Angara previously served for three consecutive terms, or nine years as congressman from his home province of Aurora. Currently on his first term as senator, Angara is not a candidate in next year’s elections. So his popular bill has nothing to do with earning brownie points for himself.

In closing spiel at the Kapihan sa Manila Bay, I quoted the popular idiom: “In this world, nothing is certain but taxes and death.” But Angara had the last word with his witty remark: “Or you’re taxed to death.”