UNPOPULARITY
MANILA, MARCH
14, 2012 (PHILSTAR) CTALK By Cito Beltran - For more than
a year and a half, President Noynoy Aquino has resolutely pursued his vision to
rid our country of corruption. From tax evaders to smugglers to corrupt
government officials from the Arroyo administration, P-Noy has led the campaign
and however effective his campaign maybe, there is no doubt that he has done
what he said he will.
What made all of this possible in part was the fact that the tax evaders,
smugglers and corrupt officials were guilty and left enough bread crumbs for the
P-Noy administration to track and build a case on. Another bonus that P-Noy had
going for him was his high popularity ratings.
Recently the P-Noy administration decided to launch another campaign, one
that intends to correct the lopsided valuation of taxes, duties and fees that
government collects from the private sector.
In many cases, the government has really been on the losing end of the deal
particularly in the case of cigarettes and mining. Compared to the tax rates
imposed by other countries in Asia, it is clear that lobbyists and allies in
Congress have successfully protected the interest of the cigarette manufacturers
and the mining firms.
So now comes the move on the part of the Department of Finance and Malacanang
to rewrite or to "right the unrightable wrong" by way of executive orders.
No less than DENR Secretary Ramon Paje spearheaded the proposal to increase
the taxes on mining firms.
In the meantime, the DOF under Secretary Cesar Purisima has apparently heeded
the advice of international financial bodies as well as the United Nations to
raise taxes on cigarettes as a deterrent to grade school or high school age
children who may choose to spend their allowance on more important things than
cigarettes.
This new move is apparently not going to be a walk in the park for the P-Noy
administration.
Unlike crooks and criminals, the cigarette and mining reps are not going to
run and hide or whimper in compromise.
In fact the mining sector has flexed its muscles at their critics, unleashed
tons of cash on media and has gone all out by hosting a very publicized event
regarding the concerns of the industry.
While all the media campaigns and forums have been designed or aimed at their
critics, it is an indirect message to Malacanang that the mining industry will
not take the proposed taxes sitting down.
To begin with nobody likes new taxes, everybody is paranoid that if you give
government one hand today, it will want your arm next year.
Finally, as I have learned from the pharmaceutical industry, the reason why
multinationals don't like such government action is because whatever "new"
trends take place in the Philippines could be or will be copied in the region if
not around the world.
For example, the "Cheap Medicines Act" of the Philippines has now set an
example for other third world countries to copy. Once this happens in the mining
industry, the losses of multinational companies in the Philippines will no
longer be an isolated case but a regional reality.
The last thing multinational mining firms want to see is for the government
to pass executive orders that Indonesia, Malaysia, Myanmar etc could copy.
Ironically, because of lobbyists and supporters in Congress, the Philippine
government has been prevented from "copying" what Thailand and other neighboring
countries have done by way of raising duties and taxes on cigarettes.
As it now stands, the Philippine government is the first to be prevented from
taking pro-people initiatives in terms of taxes and it is the last to join the
club or take advantage of trends in taxation in the region.
So, the P-Noy administration now stands before the doorway to unpopularity
and conflict.
Does the administration of President Noynoy Aquino have the political will
and resolute courage to do what is right; to impose the correct taxes for
government or will they fold up and pursue "political correctness"?
This situation is not as simple as making a choice.
If P-Noy stands his ground as he always does, the government wins in terms of
more revenues, P-Noy's leadership and popularity rises, and his cabinet
secretaries will be more empowered to be proactive in their policy making.
The public will admire his commitment to the "Matuwid na daan" vision and the
victory will strengthen the image of his administration.
On the other hand, the P-Noy administration could choose to be politically
correct on the matter and not pursue the tax reforms.
This will placate the mining and cigarette industry. This however will prove
to be the hole in P-Noy's armor. He will have to contend with cabinet members
who will effectively be diminished and disgruntled.
Even worse, the administration will be committing a very public admission
that they don't have the political will to correct what is blatantly wrong when
it involves big business or industry.
So far all I can guess from a distance is that Secretary Ramon Paje and
Executive Secretary Jojo Ochoa are playing "Good Cop-Bad Cop" perhaps in an
effort to draft an acceptable compromise with the industries concerned.
The cigarette lobbyists are expected to once again go to their favorite
charities in Congress who in turn will ultimately raise the claim that only
Congress has the authority to pass taxes! Ideally compromise is good but it must
not be at government's expense or for the profit of lobbyists and lawmakers.
Judging from the movement on the ground and what I've heard about backroom
negotiations, it is clear that the players in the mining and cigarette sectors
are running scared and somewhat expecting that, if Noynoy Aquino used the DOJ
and the BIR against the enemies of the State, chances are he will, if convinced,
push through.
As they used to say in the game "Let's Make A Deal"; which door is it going
to be: the door of unpopularity? Or the door of compromise?
Chief News Editor: Sol Jose Vanzi
© Copyright, 2012 by PHILIPPINE HEADLINE NEWS ONLINE
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