Improving the government’s delivery of services to Filipino families is the primary goal of reforming the country’s tax measures, Senator Pia S. Cayetano reiterated on Wednesday (August 21).
“We’re passing taxation measures not because it is being imposed upon us by any international body. We’re in a position where we are cleaning up our [own] house, not because we have to but because it’s the best thing to do,” Cayetano told media members at the Kapihan sa Manila Bay in Cafe Adriatico, hosted by journalist Marichu Villanueva.
The senator currently chairs the Senate Committee on Ways and Means, which is tasked to tackle the Comprehensive Tax Reform Program (CTRP) as part of government’s effort to achieve its targets under the United Nations’ Sustainable Development Goals (SDGs).
The CTRP includes proposals seeking to lower the corporate income tax (CIT) and rationalize tax incentives of businesses (Package 2); impose higher excise taxes on alcohol products and e-cigarettes (Package 2+); reform the property valuation system (Package 3); and rationalize capital income taxation (Package 4).
Cayetano said she plans to conduct a hearing every week to discuss the tax measures. The panel’s discussion on hiking excise taxes on alcohol is set to resume next week, followed by two to three more hearings on e-cigarettes and vape products.
“I want to be sure that all stakeholders have a chance to be heard on record,” Cayetano noted.
The senator said her primary duty as ways and means chair is to ensure that the government will generate enough revenues to fund its social services on health, education, and the environment.
Package 2+ in particular seeks to bridge the current funding gap of the Universal Health Care (UHC) Program.
“Our UHC program is moving forward. But I really want to see it further funded. That’s where my passion is coming from to make these [tax reforms] happen. We want to be able to help our people feel the effects [of UHC],” Cayetano said.
“At the end of the day, taxation is not just to raise funds. It’s also to protect the health of Filipinos,” she added.
Package 2: CITIRA bill
Meanwhile, the senator said she is also keen on proposals to lower the country’s corporate income taxes (CIT) and rationalize incentives given to investors.
“We have one of the highest tax rates in corporate Asia. That paints a not very inviting picture to investors. If we want to be competitive with our ASEAN neighbors, one thing that we can do is to reduce the corporate income tax rate,” Cayetano cited.
She said the government is also losing revenues due to the gaps in our policies on granting incentives to different businesses.
“We have so many agencies offering different kinds of [incentives] packages. Tayo lang pala ang may forever. In other countries, they put a timeline. And despite our incentives, we are still not the go-to place of investors in Southeast Asia,” Cayetano said, stressing the need to rationalize such grants.
Package 3: reforming the Property Valuation System
Another tax measure awaiting passage is Package 3 of the CTRP, which seeks to introduce reforms to develop “a just, equitable, and efficient real property valuation system.”
Cayetano stressed that the country’s outdated property valuation system is “impairing our ability to conduct business well.”
“Imagine, hindi natin nalalagay sa tamang value ang mga [land resources] natin. That’s something that I do hope we can address through a tax reform measure,” she said. #
Transcript of interview with Senator Pia S. Cayetano on sin taxes on alcoholic drinks
Reporter: There was an issue raised about corruption in PhiHealth. Sen. Gatchalian said before we hike taxes anew, why not reform that first? What can you say about that observation?
PSC: That’s why we have multiple committees in the Senate. One committee, which is the Blue Ribbon Committee, looks into that and the reason I accepted the position as chairman of the Committee on Ways and Means is because it is this time in our life span that we have a President that is very anti-corruption.
So if there’s any chance that this corruption issue should be addressed, it would be under this administration. So I am hopeful that as I take on the task to look for funding for our social programs, there are committees within the Senate and then there are agencies in the government that are addressing corruption issues that are very important.
Reporter: You don’t think that’s going to be a roadblock, that some senators might be hesitant?
PSC: It has never worked that way. My task in my committee is to hear the presentation of DOF on taxation and to hear the issues surrounding taxation. That is one issue but it’s not the only issue that I have to confront.
Reporter: The DOF said that the expected revenue from the House version is P16.6 billion. Are you likely to push for something higher for the Senate?
PSC: Well for me, as long as I am convinced about the goals set by DOH, the funding that they want to raise, and the other issues raised by the industries and other concerned parties are addressed, I am more than happy to target the goal of DOF.Because I work with the administration. So that is my goal. As to whether I’ll be able to deliver that, that we have to see.
Reporter: Ma’am you also asked a checklist from PhilHealth and DOH because you said you were concerned about what’s covered by the no-balance billing etc. to justify to the people the tax raise.
PSC: Actually, I am aware. Because my team and I are very much. We always check with DOH and PhiHealth what are the changes in their coverage. So I want it to be available to other legislators, both houses of Congress, even media, even other influencers when it comes to health.
Like I was talking to Dr. Willie Ong [Note: He was a guest in the Senate gallery during Tuesday’s session], he has such a huge following. Dapat alam namin itong lahat. So that when people ask, covered ba yan o hindi, alam na natin. Hindi na issue dapat kasi yung kung what is covered or not. The issue would be, when will something else be covered next, right?
I mean, that should be information at our fingertips. So we should be able to know that vaccination is covered. You go to the healthcare center, that is covered by DOH. That’s preventive medicine.
I know for a fact, appendicitis is covered. Pero certain cancers, I remember na-lobby namin na ma-include ang breast cancer. But I don’t think they are able to cover the entire treatment.
So we need to know that so that we can understand how much work we have to do para ma-complete pa yun. Kasi even in the most developed countries, wala pa naman akong nakita na lahat ng klase ng sakit, andami mong nakita nagfa-fundraising ng patakbo, ng mga bake sale, kasi healthcare is very expensive.
Reporter: As far as your advocacies are concerned, what is your wish list, conditions, accommodations, which should be under the no-balance billing?
PSC: Ang advocacy ko kasi is healthcare in general. Syempre may mga personal pa ako dun. Pero, it’s my job to detach myself from my advocacy and decide what is the best. The best is preventive healthcare.
So a big budget should be going to promoting the use of vaccination. That was my privilege speech yesterday. You know, we can talk about these catastrophic diseases – the reason you call it catastrophic is because minsan lang yan tumama, maliit lang ang percentage ng tinatamaan nito, pero mabigat, yun ang masakit, mabigat. Ito yung mga iba’t ibang klase ng cancer, ganun.
But if you compare that to vaccination, na-eradicate na nga yung polio, tapos ngayon babalik dahil ang mga nanay hindi pinapabakunahan ang mga anak, yun para sa akin very important.
It’s not just an advocacy, it’s preventive healthcare that will prevent the comeback of an ailment that was already eradicated from the Philippines. So that’s what we should focus on. We should put more funding into ensuring that this information penetrates through every mother who has to make that decision.
That’s very important. Inasmuch as my heart breaks, because my father had liver cancer. So pwede kong sagot sayo advocacy ko, liver cancer, diba? Marami ho akong kilala na nagkaroon din ng breast cancer. Pwede ko rin ipaglaban na yan ang advocacy ko.
But the reality is you have to look at the facts and the figures kung ano yung pinaka-prevalent na mga health issues. And that’s available naman sa DOH. But kaming mga legislators and other public figures who dispense our knowledge to the public should have that information para nase-share din nila ng tama.
Reporter: Regarding reduction in alcohol consumption… [Inaudible question / Note: Is there proof that raising taxes on alcoholic drinks really discourages drinking?]
PSC: Ako personally, I want to see the studies that really show us at what point does an increase in price affect the consumption. Of course we want to see that. Studies naman yan, data naman yan. We want to see that.
But on the other hand, I think it’s proven, I mean, you don’t have to be a social welfare expert. You just need to hear the stories to know that alcohol abuse is correlated to a lot of domestic violence, with your partner, with children, unhealthy home environments. That’s why it was made very clear that it was a public health issue.
Alcoholism is not just a social issue. It’s not just a problem of your neighbor. It’s a public health issue. When you have communities where children walk around and kaliwa’t kanan inuman ang vibe, that’s not a healthy environment for children to grow up with, right?
So these are really serious public health issues that we need to address. And is it partly because alcohol is easily available? Could be. I’ll tell you why. One of the arguments that they always tell us is don’t make it expensive so that it’s very easily available and affordable to the poorest of the poor.
And that sadly is an argument always in poor countries. So para na lang sinabi mo porke mahirap sila, sige lahat ng bisyo sa kanila ibigay. Pero yung mga ibang benefit na nakukuha ng may kaya, hindi naman binibigay sa kanila. Hindi naman tama yun, diba?
What you make available to them are the products that are harmful to them? How sad is that?
Reporter: Sa plain packaging proposal [for alcohol products], are you bent on that? Could you give us an overview?
PSC: I just came up with that because I was so disgusted by the fact that there is packaging for alcoholic beverages that clearly to me is attractive to children. [Questioning manufacturers] Why did you do that to children, to teenagers?
The fact that a grown man, like my colleague, Senator Bong Go, would say, “Wala bang ibang kulay nito?” It means cute siya. It means cute yung packaging. So kung ganyan lang gagawin nila, and to think that they cannot even think that it is irresponsible to package it that way, I’m gonna make it white and black packaging.
I will file a bill. I would say nga, this is inspired by the plain packaging that is already practiced I think in Australia? Canada? Plain packaging of cigarettes… My idea to recommend plain packaging for alcoholic beverages is inspired by plain packaging for cigarettes, which I believe is practiced in Canada or Australia.
Reporter: So for the Philippines, alcohol and cigarettes po ang magiging plain packaging?
PSC: Binabato ko lang naman yun kasi naiinis ako na hindi ko nakikita yung responsible standards na dapat nanggagaling mismo sa mga manufacturers. For me, hindi ko naman kailangan sabihin sa inyo na ba’t masyadong pa-cute yang packaging niyo?
Kung matanda umiinom niyan kailangan ba pa-cute yung packaging? Of course not. So that’s why sinasabi ko na if they cannot even moderate or police themselves, then I’m going to propose something like that.
Kasi for me it’s common sense. Sasabihin naman nila, “We’re not targeting the youth, nakalagay dun [sa package], ‘for 18 years and above.’” Ba’t ganun yung packaging? #
Senate Ways and Means Committee Chair Pia S. Cayetano will lead on Tuesday (August 20) the panel’s second public discussion on the government’s Comprehensive Tax Reform Program (CTRP).
Discussions will focus on Package 2+ of the CTRP, which imposes higher excise taxes on alcoholic beverages. E-cigarettes, including heated tobacco and vapor products, are also covered by the proposal, but these will be taken up separately in a future hearing.
Cayetano said Package 2+ of the CTRP aims to discourage consumption of various ‘sin’ products among Filipinos, especially the youth and poor. At the same time, the proposal ensures the financial sustainability of government’s Universal Health Care (UHC) program.
“In the Ways and Means Committee, it’s my job to look for funding for our health programs, because I am very familiar with the needs of Filipino families,” stressed Cayetano, one of the Senate sponsors of the original Sin Tax Reform Act of 2012 (RA 10351).
“When it comes to sin products, these are taxed high in several countries all over the world. Sadya hong hindi mura ang mga nakakamatay na produkto sa maraming bansa. At binubuwisan natin ito dahil ayaw po natin na mamatay ang mga Pilipino sa mga sakit, aksidente, at peligro na dulot ng mga produktong ito. Ayaw din natin na mura ang alak at sigarilyo para hindi nabibili ng kabataan,” explained Cayetano.
The government’s official position will be presented by officials from the Department of Finance and the Department of Health.
Representatives from various agencies were invited to give their position on the proposal, including the Department of Transportation (DOTr), Metropolitan Manila Development Authority, Philippine National Police’s Highway Patrol Group, Land Transportation Office; World Health Organization; Motorcycle Federation of the Philippines; and ImagineLaw, Inc.
Civil society and medical organizations were also invited, including Health Justice; Action for Smoking and Health; Action for Economic Reforms; Public Services International; University of the Philippines College of Medicine; Independent Health Advocate Manila Doctors Hospital; Kalusugan ng Mag-Ina; Southeast Asia Tobacco Control Alliance; Philippine Medical Association; Philippine Society of Gastroenterology; Hepatology Society of the Philippines; Philippine College of Physicians; Philippine Academy of Family Physicians; Philippine College of Chest Physicians;
Philippine Pediatric Society; Philippine Society of Clinical and Occupational Toxicology; Philippine College of Addiction Medicine; The Society of Adolescent Medicine of the Philippines; Philippine College of Occupational Medicine; Philippine Psychiatric Association; Philippine Mental Health Association; Philippine Neurological Association; Philippine Society of Medical Oncology; Philippine Heart Association; Philippine Society of General Internal Medicine; Philippine Society of Hypertension; Philippine Society of Nephrology; and Philippine Society of Endocrinology, Diabetes, and Metabolism.
Also asked to join the hearing were women and children groups – Child Protection Unit of the Philippine General Hospital; Safe Kids Worldwide Philippines; Commission on Women; and Child’s Rights Coalition.
Tax reform measures form an integral component of the Duterte administration’s strategy to achieve its growth targets under AmBisyon 2040 and the United Nations’ Sustainable Development Goals (SDGs). #