INADVISABLE TO IMPOSE NEW TAXES DURING
ECONOMIC CRISIS - PIMENTEL

Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) today said the administration's plan to impose new taxes or increase the rates of existing ones betrays its insensitiveness to the economic condition of the majority of Filipinos who have been affected by the global financial crisis.

Pimentel said Congress is being coaxed by Malacañang to impose a tax on text messaging and to raise the tax rates for so-called "sin products" (liquor and cigarettes) to make up for the deficiency in revenue collections and to narrow down the budget deficit.

"But in times of economic slump, it is wrong for the government to impose new taxes. How can you justify a measure that will add more burden to the people at a time when they are suffering from financial hardships?" he said.

"That should not be the action of a government that cares for the welfare of the citizenry. What the government should do is to stimulate the economy and not to make life even harder for businessmen and consumers."

The minority leader reiterated his stand that if and when it is extremely necessary to slap a tax on text messaging, it should be charged against the cellphone service providers and not against the phone subscribers. He said the service providers are raking in so much profits on which the tax on text can be applied.

However, Pimentel said it is doubtful whether any new tax measure will be approved by Congress this year given the unfavorable circumstances.

First, he said that normally legislators are reluctant to pass any new tax measure during the period preceding an election.

Second, he said the administration has yet to account for the use of the multi-billion peso collections from the road users tax in the face of allegations of illegal disbursements.

Third, he said President Gloria Macapagal Arroyo has vetoed special provisions in the 2009 general appropriations act designed to enhance transparency in public spending. One provision that was vetoed would have required the President to submit to Congress a breakdown on the disbursement of lump sum appropriations and the recipient agencies.

"Clearly, the mood in Congress is against new taxes. What we lawmakers want is for the executive branch to exert more efforts in improving collection of existing taxes and to plug the loopholes in the collection system. In short, the challenge that the executive branch must face is to reverse the decreasing tax collection efficiency," Pimentel said.

Describing the plan to slap new taxes as ill-conceived, Pimentel said the administration should have instead included tax relief measures, specially for distressed industries, in its much-ballyhooed economic stimulus package.