Duterte to Senate on tax reform: You want me to kneel before you?

MANILA, Philippines — President Rodrigo Duterte on Monday called on the Senate to pass his administration’s tax reform package, which he said is crucial to funding the budget for next year and his ambitious infrastructure projects.

 

In a rambling, two-hour address before the joint session of Congress, Duterte put the spotlight on the senators as he asked the chamber to pass the first of the five packages of reform laws that aim to restructure the country’s taxation system. 

 

“I call on the Senate to support my tax reform in full and to pass it with haste,” the president said.

 

However, this seems easier said than done as Senate Majority Leader Vicento Sotto III admitted.

 

Sotto said that the Senate could not yet pass the reform package as the committee on ways and means is still conducting hearings on it.

 

The majority leader said that particularly sticky is the excise tax on oil, which would push fuel prices higher. That will likely mean higher fares and commodity prices. 

 

“Let’s hope that the committee in the Senate can tackle it as soon as possible in its entirety. Meron lang mga controversial ng kaunti. So hopefully we’ll try our best,” said Sotto who, however was not able to provide a specific timeline for its passage, said.

 

“We’ll try to cooperate with the president,” he added.

Duterte at one point even kidded the senators for not clapping when he made his plea, watched by legislators, government leaders, members of the diplomatic community and millions of Filipinos.

 

“Ayaw man pumalakpak. Pati si ano wala. They are not clapping so maybe… Si (Juan Edgardo "Sonny") Angara ayaw din mag-clap. Bantay ka lang sa eleksyon, tingnan mo,” the president said as the audience at his State of the Nation Address cackled in laughter. 

 

Angara is chairman of the ways and means committee, which tackles tax measures.

 

The president said that his tax reform program is crucial to funding his pro-poor programs and projects. 

 

He said that upon passage, the vulnerable segments of our society will immediately feel the reform’s positive impacts. 

 

“These reforms are designed to be pro-poor , specially if the people understand how revenues will be spent. For the poor and the vulnerable who are the heart of my tax reform, your [senators’] support will ensure that the benefits of tax reform can be felt immediately by them,” he told the audience although it was obvious that he was directing his remarks at the senators.

 

The president commended the House for passing the first part of his tax reform program on May 31. He then trained his attention on the senators listening to him, whose approval he needs for the package to become a law. 

 

“The fate of tax reform is now in the hands of the Senate. Ano bang gusto ninyong gawin lumuhod ako niyan?” the president said as the audience again erupted in laughter.

 

Sotto said on this: “Kinakabahan sa… nagbibiro lang yun. Kinakabahan siya. Eh, hindi pumalakpak... Ibig sabihin, hindi sumusuporta dun sa package in its entirety.”

The government needs the tax reform package to fund its massive infrastructure spending. The reform contains cuts in personal income taxes, expansion of the base of the Value Added Tax and upward adjustments on excise tax on oil, vehicles and other products. 

 

The version passed by the Lower House did not contain all the provisions the Department of Finance proposed. 

 

The revised tax reform measure is expected to generate revenue of about P82 billion, a far cry from the administration’s target of P162.5 billion.