The battle cry of P-Noy’s administration, “Ang Matuwid na Daan” (the straight path), tries to encapsulate the thrust to cleanse the bureaucracy of graft, corruption, wasteful use of government resources, personal favors, under the table deals and many other unwanted practices and attitudes.
The objective is to make this battle cry as the overarching performance criteria for each and every government process and activity. Hopefully, this change in attitude among government officials and staff will also cascade to the private sector and eventually to each and every Filipino as we go about our day to day living.
Following the “straight path” could be the way to erase crab mentality, or the tendency to try to “short change” or pull a fast one on another and to try to get away with transgression of rules.
Imposing “ang matuwid na daan” as an absolute criterion raises the question as to what constitute “the straight path.” Is there only one “straight path” to the exclusion of others?
A grievous mistake P-Noy’s close associates could commit is to have an arrogant view that theirs is the only acceptable “straight path.” Even among the supporters of P-Noy, differences have emerged as this theme is adopted in crafting government programs and activities.
An example of these differences that recently grabbed media attention is the exchange of harsh words between Rep. Hermilando Mandanas, chairman of the House Ways and Means Committee, a Liberal Party member and identified as a P-Noy congressional ally, and Budget Secretary Florencio “Butch” Abad, one of the trusted members of P-Noy’s elite circle of personal advisers.
These conflicts, unless immediately managed, would distract efforts and attention from ultimately achieving the objective of changing attitude and setting higher standard of governance.
Mandanas view of “matuwid na daan”
Rep. Mandanas believes that the 2012 national government budget submitted to Congress should be changed because the share of local government units (LGU) in the national taxes has been reduced.
According to Mandanas, the LGUs should get their just share in the national taxes as the President emphasized during the President’s recent State of the Nation address that LGUs are at the forefront of the delivery of basic services in line with “matuwid na daan.”
The just share of LGUs in the national taxes, also known as the Internal Revenue Allotment (IRA), says Mandanas, that has to be appropriated and released is “illegally and partially withheld” by the national government.
This amount, as per Mandanas’ approximation, has already accumulated to about P500 billion. In fact, in the current 2011 budget, he says P68 billion was not appropriated, while another P60 billion in the 2012 proposed budget from the IRA for provinces, cities, municipalities and barangays was instead appropriated for national government projects.
He adds that these claims are based on provisions found in the Local Government Code that the IRA of LGUs is based on the National Internal Revenue Taxes (NIRT) collected by the national government. The Local Government Code specifically states that the share of LGUs is 40 percent of the NIRT.
Mandanas says that the definition of the NIRT in the tax code is clearly defined to be income taxes, value added taxes, excise taxes, documentary stamp taxes, percentage taxes and other taxes.
However since 1992 up to the present, according to Mandanas, the IRA set aside by the national government did not include the share of LGUs in the collection of the NIRT by the Bureau of Customs (BoC) as agent of the Bureau of Internal Revenue (BIR).
While the BIR is mandated by the national government to assess and collect the NIRT, the BIR is also authorized to appoint agents and deputies for collections. One such is the BoC, which had been constituted by the BIR as an agent to collect the NIRT on imported goods.
When Customs collects VAT, excise taxes and documentary taxes in behalf of the BIR, these are all considered part of NIRT collections, says Mandanas. Therefore, the national government should justly set aside what the LGUs should receive, he adds.
Mandanas strongly feels being wronged especially since the Supreme Court ruled favorably in a 2004 decision in a case he filed when he was still governor of Batangas against the national government.
But as with the previous government, Mandanas has not been able to budge the national government to give to the LGUs its share in the collections of the BoC while acting in behalf of the BIR. This has prodded the Congressman to question the principle of “matuwid na daan” that the P-Noy administration has been proudly waving.
Excise tax reforms needed
Another “matuwid na daan” as pushed by Rep. Mandanas is the need to reform the excise tax for “sin products” or alcohol and cigarettes.
Since 1996, “protected” cigarette brands as listed in Annex D of RA 8424 comprising about 90 percent of the market had been increasing in retail prices, but the share of government taxes has been declining. This is because the excise tax has been pegged at 1996 levels.
From 2000 to 2006, the estimated “losses” for government has already been pegged at P144 billion while our effective excise tax equivalent to 3 percent of total government revenues remains one of the lowest in the region. China is at 8 percent, while Sri Lanka and Indonesia are at 7 percent.
Mandanas is pushing for an immediate reform in tobacco excise taxes that will remove the preferential treatment received by the monopoly joint venture of Philip Morris and Fortune Tobacco over the last 14 years.
In Mandanas’ proposal, removing the “protection” on most cigarette brands will immediately generate at least P44 billion in government revenues during the first year of implementation. At the very least, this amount would help defray the state’s meager health care budget that is taken up by ills associated with cigarette smoking.
More importantly, such reform would enhance the image of the country as an open economy with fair trade practices and level playing field rules.
“Matuwid na daan” is for everyone
As P-Noy, his closest personal advisors and allies determine the “matuwid na daan” they should welcome challenges from everyone. And on our part, it is our responsibility and right to challenge and participate in the process of bringing about the much needed change in attitude in governance and in our dealings with one another. The search for the “straight path” should be every Filipinos advocacy.
