Blast From the Past

By Hon. Ruffy Biazon
Representative
Lone District of Muntinlupa City

Last Friday, during my People's Time in my district office, I received a surprise visitor from the past.

Alex, a batch mate of mine from elementary to high school in Malate Catholic School, came to my office to seek my assistance. He is not a resident or of my district but he decided to go to me instead of the congressman where he lived since he felt that being a long-time schoolmate, I would readily receive him. In spite of that, he told me that he still had a slight apprehension in going to me since I might not give him the time or opportunity to talk to him.

Alex is the son of Aling Cita, who was the janitress in our school. I remember her fondly, patiently cleaning up after the mess we made during recess. She stayed with us in the school premises whenever the school bus was late in bringing us home, making sure that the resident "mu-mu" wouldn;t bother us while we waited for our ride home. In our social studies classes, she was always included in the "persons in your neighborhood" topic, earning a space in the test items that we had.

"Who maintains cleanliness and orderliness in the school?", the question in the quarterly test asks. All the way through elementary and on to high school we would encounter that question. SOmetimes, we would use ALing Cita as the subject of our sentences during English class.

Yes, she was a benevolent presence in the school, very much like a mother to all of us students. Everyone was kind to her, even the school. IN fact, the school took in her son as a scholar, belonging to our batch, Batch 86.

Looking back, I never knew Alex that well. ALthough we were in the same batch, we belonged to different sections. I knew that he was Aling Cita's son but I never hung out with him or belonged in the same "barkada" with him. We were practically strangers.

Maybe that's why when he came to my office, it did not register to me who he was, in spite of the fact that in my appointment schedule, his name was there. As is my practice, everyone who wants to meet with me, whether he is the president of a company or a tricycle driver, is given his time to speak to me personally.

So it was that when he entered my office, I proceeded to settle into the "how can I help you" mode. His first words were, "hindi mo na ba ako natatandaan?" My mind started racing, searching all memory banks for the picture of where and when I met him. I came up blank.

"Anak ako ni ALing Cita, yung janitress noon sa Malate", was his humble follow through. Instantly, with a flash, my brain pulls out the picture of Aling Cita, the kind, gentle "manang" who kept our toilets clean and corridors polished.

"Oo! Naalala na kita!". Actually, I still couldn't find a picture in my mind how he looked like back then. Then I proceeded. After the initial niceties and recollections of days past in Malate, I asked again what I could do for him.

He said that he needed help with employment. He said he's been out of a job for a couple of months now, and with two children to feed and educate, his situation was desperate. He thought about going to me after he met another batchmate of ours who suggested to him to visit me.

I could see that he was in dire straights. He wouldn't come to visit me in Muntinlupa all the way from Pasig unless he really needed someone to help him. At this moment, he saw hope in me that I might be able to help him.

That's why it was doubly difficult to see him there in my office. Because as things would have it, a legislator's office is the least capable office to provide employment. FIrst of all, there is a limit to how many staff one can take. Second, whatever allocated positions are there are usually filled up already.

UNlike local government units, we do not have a Public Employment Office which has the mandate of looking for jobs for the populace. A congressman's duty and responsibility is to legislate.

Some say that as congressman, I could influence local businesses to hire our recommendees and that there are positions allocated for us, as a form of PR by the companies. But the truth is it isn't like that. We have no influence whatsoever. Unless of course, if I use my position to exert pressure (very slight pressure) on them. But I don't do that.

But it pained me to see him in that situation. Although as I said, I wasn't really close to him back in elementary of high school, the fact that we grew up together gave me a more personal involvement in his plight.

His situation is representative of the situation of a lot of our countrymen, fighting a daily survival in a world that is abundant but at the same time selfish. Sometimes it seems life is unfair, that while some lavishly splurge their riches, others can only dream of the next meal.

It is doubly frustrating and discouraging on my part---I am in a position of power yet I am powerless to immediately provide a solution to Alex's problem. Yes, I could temporarily alleviate his situation if I give him several hundred pesos to get past the next couple of days. But where will that bring him afterwards? Back to where he is now.

ONe of the most difficult emotional and mental stresses of this job is having all the problems that beset this nation--poverty, divisiveness, conflict, etc.--- dumped on your lap yet solutions are beyond your reach. In the whole scheme of things, solutions to these problems do not come from one direction or source. Most often, collaboration, coordination and cooperation among several entitities are needed in order to formulate the answers to our problems? But sad to say, unity, or the lack of it, is one of the problems itself!

Going back to Alex, I had to do something for him. I then remembered a friend of mine who owned a maintenance firm (janitorial services) in Pasig. It would be a favor I would be asking, so employment woudl be guaranteed. It would be in Pasig, so his cost for going to work will be minimized.

But I had my apprehension about that particular option. Taking that job would mean Alex will end up a janitor. A janitress' son ending up as a janitor. Somehow, it did not seem right to me .
I had to look for another option....

(originally posted at Rep. Biazon's weblog)

Effective Revenue Collection: A Liberal's Legacy

By: HON. DANILO E. SUAREZ
Representative
Third District, Quezon

The nation owes to the Liberals of the 12^th and 13^th Congresses the present state of revenue collection in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). During the 12^th Congress, Republic Act 9282 was enacted into law while the 13^th Congress gave birth to Republic Act No. 9335. The enactment of these two sensible and dynamic pieces of legislation came at a time when the government needed them most. As a result, the BIR has reached its target beginning the first quarter of 2005. In 2006, the BIR did the same feat and is headed towards a more effective tax collection effort. BOC, on the other hand, barely missed its goal in 2005 but its performance is a far cry from its dismal achievement in the previous years. In 2006, BOC boasts of exceeding the targets set by the Department of Finance.

Republic Act No. 9282 is a piece of legislation authored by a Liberal in the House of Representatives during the 12^th Congress, former Representative Aleta C. Suarez of the 3rd District, Quezon Province. After the bill was approved by the House of Representatives and the Senate, it was signed into law by President Gloria Macapagal-Arroyo on 30 March 2004. RA 9282 in effect amended RA 1125 by giving the Court of Tax Appeals criminal jurisdiction over tax and customs cases, increasing its membership, expanding its organizational set up and raising its level to that of the Court of Appeals. This law completely changed the rule in RA 1125 wherein the jurisdiction over criminal cases involving violations of the tax and customs laws is lodged with regular courts, while the civil aspect of these cases is with the Court of Tax Appeals – a set up which had resulted to needless delays in the final disposition of cases.

Under RA 9282, any decision or ruling of the Court of Tax appeals in the exercise of its exclusive appellate jurisdiction which does not involve question of law or legality of any tax imposition shall be final and executory. However, under different circumstances, any party adversely affected by any ruling, order or decision of the Court of Tax Appeals in the exercise of its exclusive and original jurisdiction, or in the exercise of its appellate jurisdiction involving legal issue or question of law may appeal therefrom to the Court of Appeals in accordance with the Rules of Court by filing with the said Court of Tax Appeals a notice of appeal and with the Court of Appeals a petition for review, within fifteen (15) days from the date he receives a notice of ruling, order or decision with the proviso that failure to appeal within the said period would render said ruling, order or decision final and executory.

Corollary to the reorganization of the Court of Tax Appeals is a provision providing for the automatic assumption of the incumbent Presiding Judge and Associate Judges to the positions of Presiding Justice and Associate Justices, respectively, without the need of new appointments.

With the jurisdiction over both the civil and criminal aspects of a tax case vested in one court, RA 9282 is expected to effectively enhance and maximize the development of jurisprudence and judicial precedence on tax matters which are of vital importance to revenue administration. The same may not be achieved if another court exercises criminal jurisdiction as in the previous set up. With the rich source of jurisprudence, the Court of Tax Appeals can easily rule on various matters pending with the CTA.

On the other hand, RA 9335, championed by another Liberal ( the author) and passed into law during the 13^th Congress, addresses the problem in revenue collection in the BIR and the BOC by devising a system of reward and punishment among the officials of these government agencies. Entitled “Attrition Act of 2005”, the law proposed a straightforward strategy to plug the massive losses in revenue due to under-collection by reforming the system of setting revenue target and then penalizing significant under-collection through attrition or rewarding those who exceed their targets.

Under the law, a Rewards and Incentives Fund is created to be sourced from the collection of the BIR and the BOC in the excess of their respective revenue targets of the year, as determined by the Development Budget and Coordinating Council (DBCC), in the following percentages:

Excess of Collection Over the Revenue Targets is 30% or below = Percent (%) of the Excess Collection to Accrue to the Fund is 15%

Excess of Collection Over the Revenue Targets More than 30% = Percent (%) of the Excess Collection to Accrue to the Fund is 15% of the first 30% plus 20% of the remaining excess.

To set the guidelines for the grant of incentive and for the implementation of the penalty, RA 9335 deemed it necessary to create the Revenue Performance Evaluation Board. With the creation of the Board, the expected abuse of authority or grave abuse of discretion in the implementation of said law would be corrected. In addition, affected employee is afforded procedural due process as he is given the right to explain himself before the Board and in case of adverse decision, he has the right to appeal the decision to the Civil Service Commission or the Office of the President, whichever is applicable.

The “Attrition Act of 2005” complements our anti-graft and corruption laws in two ways. On one hand, it enhances and facilitates the process of detecting and penalizing corruption by expanding the grounds for the removal from office of erring or incompetent officials in the BIR and the BOC. On the other hand, it removes the incentives for corruption. This it does by providing ample and legitimate rewards and incentives through a system that automatically allocates proportionate amounts of collections in excess of target for distribution to deserving employees and their agencies.

The Liberals have truly responded to the call of the changing times. Aware that taxes are always considered the lifeblood of the nation and their effective and efficient collection are necessary to sustain the multifarious activities of the government, the Liberals have become instrumental in crafting legislation to address these needs. With the two laws now in place, the thrust of the present administration to arrest the ballooning budget deficit through effective revenue collection is achievable. RA 9282 effectively answered the need for the speedy resolution of tax cases so that tax evaders with pending cases would be penalized and the corresponding taxes collected. RA 9335, on the other hand, addressed the corruption within the BIR and BOC through the institution of the innovative approach of reward for the achievers and dismissal for the under-achievers.

Taken from 'the Liberal', the official publication of the Liberal Party of the Philippines

Below Vatting Average: A Closer Look at the VAT Reform Bill

By Senator MAR Roxas

(taken from http://www.marroxas.com/speeches_07.php)

Juan dela Cruz is your average person, struggling with his average job in a factory, earning an honest day’s wages which he allocates for his family and savings. His friends tell him to go out of the country and look for a job that pays a lot more than his present one – say as a construction worker in Saudi, but Juan doesn’t want to leave his family. Besides, his job is earning enough for his family’s needs.

Juan and his family like to go out to the movies on Sunday after attending mass. They watch a family movie together and go out for lunch at Jollibee afterwards. Sometimes Juan buys toys for his children, a pair of shoes for his wife and a shirt for himself. This is when the pay is good and the bills are manageable.

Juan, like his fellow Filipinos, rich and poor, pay a little extra, called the Value Added Tax (VAT) for his shirt and the Sunday fun he spends with his family. Value Added Tax, by nature, is a consumption tax that is passed on to consumers of a variety of products and services. The burden in a VAT system is borne by end consumers like Juan, when he purchases certain products or avails of certain services. It is a tax we are most familiar with and part of everyday life.

When times are hard, Juan can defer from his Sunday fun to keep expenses down. But with the latest VAT reform bill that includes taxing the power sector, he too will plunge into the fiscal crisis that the country is experiencing. The underlying principle of my amendments is to ensure collection of the needed revenue by taxing the proper entities. By doing so, government does not hamper or impede the creation of both domestic and foreign investments.

At the onset, the proposal was to increase the existing VAT rate from 10% to 12% and to lift the exemptions. The items included with the biggest impact in the Senate version are power and petroleum. VAT on power will apply to all stages of the supply chain from generation to consumption.

From the very start, I opposed the imposition of VAT to the power sector. It is my belief that vatting power affects the broader economy. Compared to oil, electricity is a product that is so pervasive that it is needed for everyday life. Raising power rates affects anyone with any kind of relationship to a light bulb, power which affects everyone.

Not all taxes course their way through the economy in the same way. The difference is maybe the purchase of a shirt can be postponed, but the use of power, particularly by factories, which provide Juan dela Cruz his job cannot be postponed. Juan cannot defer his usage of electricity as he would with other vattable products such as his shirt and his wife’s shoes. However, companies like the factory Juan depends on for his income may choose to pack up and move their business elsewhere because the investment climate is no longer hospitable. If the factory closes its business, Juan will have to strive for a job in another country.

While we want to cushion the impact of this tax measure to the middle and lower classes, the fact is we need to create jobs and livelihoods. We need factories. We need businesses to operate. If power costs render us less competitive, then we would have a Pyrrhic victory, an empty victory. Jobs will be lost and there will be no VAT to collect if factories close down. When all is said and done, it is Juan dela Cruz who will pay for this. The Senate version of the bill operates instead as a disincentive to any kind of investment, domestic or otherwise.

Imagine the effect of the VAT on the power sector on the entire economy. The effect of the additional 10% is cumulative, it trickles downstream all the way from the generation companies to electric cooperatives to the end consumers. So if it is P280 billion, there will be a sum total of P28 billion in additional billing. However, the entire amount will not be collected because each segment of the chain will input/output whatever the increase was versus whatever they can charge downstream. In which case, the government will only collect anywhere from P11 to P15 billion, or maybe even as small as P8 billion. In other words, for a cumulative P28 billion as additional expenses borne by everyone, the government collects a mere net P11 billion – which is easily a losing bargain for everyone.

Not all battles are won on the legislative floor, yet many important ones are sometimes lost on the legislative floor too.

The benefits barely exceed the adverse effects of the VAT reform bill. But because the urgency for additional revenues is so great, I voted in favor of the measure, and only for this. The consequences of the bill on every Juan dela Cruz, however, foretell a grim future