House enjoins cabinet officials to attend tax hearings

MANILA –The House committee on ways and means resumes its discussions Monday on the proposed Comprehensive Tax Reform Package measure being pushed by the Department of Finance (DOF), with Speaker Pantaleon D. Alvarez and Majority Leader Rodolfo C. Fariñas requiring Cabinet members and other government officials concerned to attend the hearing and answer pertinent queries from lawmakers.

The tax reform package is contained in House Bill 4688 authored by Rep. Joey S. Salceda (2nd District, Albay) and HB 4774 by Rep. Dakila Carlo Cua (Lone District, Quirino) or the proposed “Tax Reform for Acceleration and Inclusion Act.”

The Speaker and Fariñas stressed the importance of the government officials’ presence in the next hearings of the committee chaired by Cua after some representatives of Cabinet officials and agency heads failed to adequately respond to the queries raised by lawmakers in connection with the impact of higher taxes on certain sectors.

The Speaker asked lawyer Margaret Dacatimbang of the Department of Energy (DOE) legal service to relay the House leadership’s message to DOE Secretary Alfonso Cusi to attend the next committee hearing and respond to lawmakers’ queries especially on the issue of higher excise taxes on petroleum products.

“Pwedeng paki-sabi sa DOE Secretary na magpadala ng mga tao dito na kayang sagutin yung mga tanong kasi sinasayang natin ang oras natin lahat dito. Tigilan muna yung position papers at di tayo matatapos. And tell him (DOE Secretary) to attend the meeting next time,” said the Speaker.

Alvarez made the statement after Dacatimbang failed to answer the query of Rep. Prospero A. Pichay (1st District, Surigao del Sur) about the price of 40 percent cetane. Pichay said one way to cushion the increase in excise tax on diesel is to coordinate with the DOE on the cetane requirement for diesel. When the Clean Air Act was enacted into law, Pichay said there was a provision mandating that the importation of diesel fuel should be 44 percent cetane.

“When we passed the Clean Air Act, we put a provision there that the importation of diesel fuel should be 44 percent cetane. Cetane is a grade of diesel. In the US the requirement was 40 percent cetane. So there is a big difference in price between 40 percent and 44 percent cetane. Today, the DOE is requiring the fuel industry to import 50 percent cetane. So there is now a big gap between 40 percent and 50 percent. cetane. In the US, it’s still 40 percent cetane. What is the purpose of higher cetane?,” said Pichay.

Pichay explained that if is winter in the US and one has a lower cetane, then it will be a hard starting. “When you start the engine, it does not start right away. Or if your car is on top of a mountain, your altitude is very high and you start your car, it will not start right away.,” he said.

But Pichay said there is no winter in the Philippines and the country has no highways as high as those in the US. “So why is it in the US the requirement is still 40 percent cetane, in the Philippines it is now 50 percent? So if we can use 40 percent cetane, then there is a big price difference, perhaps the excise tax that we will be imposing will not be even as much as the difference in the price of 40 percent cetane vis-a- vis 50 percent cetane. That is one thing I want to clarify with the DOE. I had asked for the price of 40 percent cetane but up to now they have not given me the price,” said Pichay.

Dacatimbang said she is not a technical person. She, however, assured to relay Pichay’s query to the office of the Secretary.

She said the DOE will submit its position paper in due time, taking into consideration the high possibility of the increase in the prices of petroleum products when there will be an increase in excise tax on petroleum products.

Cua cited the importance of the presence of invited resource persons during the hearings. “Ang mahirap kasi minsan, we deliberate, we pass it (the proposal) in Congress tapos pagdating sa Executive nagrereklamo. Sana dito pa lang inayos na, pwede naman naming kausapin at pakingggan yung position ng ibang department.”

The Speaker also noted the absence of Bureau of Internal Revenue (BOR) Commissioner Caesar Dulay during the tax hearing. He asked BIR Deputy Commissioner Nestor Valeroso to relay to Dulay to submit his proposal on how to collect taxes from the casinos.

Fariñas cited other government officials who should be attending the hearing namely : Finance Secretary Carlos Dominguez III who was represented by Undersecretary Karl Chua; Transportation Secretary Arthur Tugade, who was represented by Assistant Secretary Ed Galvante; Information and Communications Secretary Atty. Rodolfo Salalima; and Social Welfare and Development Secretary Judy Taguiwalo.

“Puro study, project study. Kailangan marinig namin ang mga heads of the different departments para maganda po,” said Fariñas.

Fariñas cited the important role of the House of Representatives on the proposed tax reform package proposal. “The Constitution mandates that all appropriation, revenue and tariff measures, as well as bills authorizing increase of the public debt shall originate exclusively from the House of Representatives. Hindi po pwedeng mag-file sa Senate because that will be taxation without representation,” he said.

Farinas added that in the House and in every nook and corner of the country, every Filipino is represented by one of the lawmakers. “Pinapapunta ninyo kami lahat dito sa hearing dahil may gusto kayong measure. Ayaw naming mag-tax dahil galit ang tao sa tax. Ang DOF gusto i-kolekta agad, di pa nga kayo nakaka-collect sa existing taxes. What happens is we are penalizing the diligent taxpayer. Pumunta naman kayo rito. Ipakita naman ninyo na this measure is very important,” he said.