Beware: Tobacco industry is anti-poor but pretends otherwise.

It's been a while since my last post, but no excuses.  I'll just get to the point: ang kakapal talaga ng mga mukha ng ilang mga kongresista.  Still they refer to themselves as "honorable" congressmen/women.

I'm referring to the supposed "consolidated" bill that Rep. Eric Singson, Jr. (Ilocos Sur) and nine other supposed representatives of the Filipino people railroaded last January 30 through the National Internal Revenue subcommittee (chaired by Singson) under the Ways and Means Committee of the Lower House.

This substitute bill consolidates the versions of Singson and Rep. Hermilando Mandanas (Batangas) but intentionally excludes the versions that seek to implement genuine reforms, those of Rep. Henedina Abad (Batanes) and Rep. Neil Tupas, as well as the administration bill filed by Rep. Joseph Emilio Abaya (Cavite), which is the same as the Legislative-Executive Development Advisory Council (LEDAC) sin tax reform bill.  In summary, Singson's substitute bill provides for only minimal tax increases, maintains the current cumbersome multi-tiered tax system, and is not indexed to inflation, all of which will neither discourage consumption by the poor or young people nor provide substantial revenues to government.  It is very obviously a pro-tobacco-industry bill.

As we all know, the tobacco industry's goal is to make as much profit as possible by making, promoting, and selling a product that is addictive, harmful to health and the environment, and causes disability and premature death.  The substitute bill of Singson allows the tobacco industry to continue its "business as usual" of victimizing more of our fellow Filipinos, especially the poor who cannot afford to become sick, pay for healthcare, or lose their jobs because of ill health/disability.

For a more detailed discussion, I refer you to AER's op-ed "Singson’s Sin Tax Bill: Anti-Reform, Anti-Poor", available on AER's website or on Business World

Thankfully, the Ways and Means Committee, led by its chair, Rep. Isidro Ungab (Davao), wisely rejected this substitute bill because of many questions it raised, as well as the lack of consultation of other authors such as Rep. Abad.

Tax Justice Network: The South East Asian Tax Forum formalised

The South East Asian Tax Forum formalised

Guest blog by Koos de Bruijn of TJN-Netherlands, and member of TJN's Global Board

In the last week of October, a Regional Tax Research Conference took place in Jakarta, Indonesia. This was organized by Action for Economic Reforms of the Philipines and Prakarsa of Indonesia with the help of Jubilee South, SOMO, Christian Aid and the European Union as sponsors of the conference. TJNL coordinator (and TJN Board member) Koos de Bruijn was one of the participants.

The inspiring conference was concluded with a big ISANG BAGSAK (a Philippine saying after which you slap your hand on the table) on the main conclusion: the formalisation of the South East Asian Tax Justice Forum.

The aim of the Forum has been agreed as follows:

• effectively conduct capacity building at national and regional levels for Tax Justice advocacy;
• secure policies or measures that will address tax issues with a regional character.
• engage regional institutions such as the ASEAN and the Asian Development Bank in relation to tax justice or tax reform.
• push for the mobilisation of domestic resources as the main vehicle to finance development.
• help linking regional and country efforts to the global campaign.

It was agreed that the Forum should meet at least once a year, with all Tax Justice-related persons from other regions welcome. This is especially important for South Asia, where there is not yet a regional Tax Justice Network.

The central theme was how to tackle inequality between rich and poor in society by tax means, or how to prevent a heavy burden on the poor.(Worth noting is this front page article in the Jakarta Globe, featuring an interview with Prakarsa's Setyo Budiantoro on inequality in Indonesia.) Inequality is a serious problem in the Asian middle income countries. Most participants agreed that a value added tax (VAT) is not the way forward in that regard. However VAT is on many political agendas in South and South East Asia.

While indirect taxes like VAT are generally regressive, the participants nevertheless recognised that indirect taxes are part of overall tax policy to generate revenues for Development. The challenge is how to make indirect taxes less regressive or even progressive, for example by taxing luxury (or unhealthy) consumption. A key argument in tackling the issue of VAT is that first other leakages should be tackled (tax evasion, corruption, etc). In other words, increasing the burden on the poor through VAT is not acceptable as long as rich people and big business can evade taxes to enrich themselves. Examples included the currently hot topic in South East Asian of taxing tobacco, and the prevalence ofround tripping in India as explained by Rakesh Mittal.

The also conference gave an update of the work all participants have been (and are) doing in their home-countries. From assessing Indonesia’s tax optimization (by Prakarsa’s Setyo Budiantoro), tax reforms and collective action (by Filomeno Sta. Ana III of Action for Economic Reforms), tax justice and development in Vietnam (byTchi Bich Diep Nguyen of the Justice Initiatives Facilitation Fund), goods and service tax in Malaysia (by Khalid Jaafar of the Institut Kajian Dasar), tax justice in India (by Rakesh Mittal), tax justice in Nepal (by professor Keshab Raj Khadka of the South Asia Alliance for Poverty Eradication), revenue and health impact of tobacco taxation (by Ulysses Dorotheo of the South East Asia Tobacco Control Alliance), negotiating good contracts in the extractive industry (by Roslita Arsyad of the Revenue Watch Institute), tax justice advocacy and campaigning in the Netherlands and the link to the global Tax Justice Network network (by myself), global tax justice movement and campaign (by Frederike Rijkse of SOMO) to global climate flows (by Lidy Nacpil of Jubilee South Asia).


In conclusion, it is inspiring to have seen all the work that is going on in Asia. Last, but not least, I would like to thank the Indonesian people for their warm welcome. I've been walking around with a smile on my face for several days since.