POSTSCRIPT / November 9, 2004 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Smoke, drink 2d max, & save RP from crisis

BE MERRY: The government is trying mightily to raise P80 billion in taxes to help carry us over the hump arising from our debt and budget deficit. Another P100 billion will be raised from administrative reforms.

Poor President Arroyo need not work too hard raising that mountain of money nor our lawmakers worry too much about losing their pork barrel in the battle of priorities for scarce funds.

All they have to do is prepare and execute an Action Plan that would make all Filipinos who love their country to smoke, drink and be merry.

An additional P7 billion in taxes (for a total of P40 billion a year) will be collected from tobacco and alcoholic drinks if the 20-percent “sin tax” formula passed recently by the House of Representatives becomes law, which is likely.

But note that the P40 billion in “sin taxes” (P24 billion from cigarettes), will be collected only from the 20 percent of the population who smoke and drink.

Now, would it not be nice if we could convince even just half (50 percent) of our 84-million population to join the fun and smoke and drink for the sake of the cash-strapped country?

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PATRIOTIC JUICES: If the present “sinful” 20 percent of the population could contribute P40 billion, enlarging that sector to become half of the population could raise P100 billion — more than the amount the government needs to plug the deficit and debt hole.

More people will probably die from lung cancer and liver cirrhosis but that is a small sacrifice that the patriots and new heroes could make for the country.

As our morbid Pampansang Awit says “Aming ligaya… ang mamatay nang dahil sa iyo.” (It is heaven for us to die for the country.)

With that, maybe Malacanang could shortcut the difficult revenue-raising campaign and focus on that idea of stirring the patriotic juices of Filipinos and making them smoke and drink to the max.

* * *

SPARE THE RICH: Note that the P100-billion revenue, way above the P80-billion target, is just from tobacco and alcohol. The “sin tax” bill is just one of eight revenue measures being pushed by Malacanang.

If stepped-up smoking and drinking could trim our budget deficit and pay our debts, lawmakers need not worry about passing other revenue measures that would hurt their high-paying clients, wealthy friends and themselves.

With the sinful poor masses already shouldering the debt and deficit burden by smoking and drinking heavily, there would be no more need for Congress to pass the other measures that would:

1. Replace the present net income tax system with gross income taxation that would hit giant corporations and self-employed individuals who resort to creative accounting to avoid taxes.

2. Increase the specific tax rates on petroleum products by P2 across the board to the displeasure of the giant oil companies not used to not having their way.

3. Rationalize fiscal incentives, withdraw inefficient, irrelevant and duplicative incentives, limit the time frame for them, and disqualify investors whose only qualification is their closeness to power.

4. Tax the indecent multibillion-peso windfall of the telecom companies.

5. Impose a two-step increase in VAT (value added tax) rate, despite clear data that the VAT system has been a colossal failure.

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DON’T FAKE IT: With the clients and themselves having been thus spared, happy days will be back in Congress, and Malacanang, faster than the perennial critics could say “fiscal crisis.”

In fact, with the apparently clear sailing of the “sin tax” measure in Congress, President Arroyo has mustered enough confidence to promise an incredulous nation that we will have a Merry Christmas this December.

But if fiscal health is not yet in the offing, why force it? Why the seemingly deliberate speed in declaring the end to the “fiscal crisis” that the President herself announced some months back?

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CHRISTMAS DEADLINE: The question reminds us that way back last Aug. 19, I said in POSTSCRIPT:

“This is not to be pushy, but I think (President Arroyo) has to show something really dramatic before the year ends, mainly by scoring a marked improvement in the economy.

“To the average Filipino head of family, ‘economy’ is something personal. We don’t care about government statistics, or the fat figures decorating the big picture. The economy is what we feel in our gut.

“If she fails to perform at least a psychological ‘parting of the Red Sea’ by Christmas to lead us to the Promised Land, the goodwill she has earned with her election last May is likely to dissipate and be replaced by the usual defeatism.

Pagod na ang mga tao. This battered nation is tired. It has waited too long already and may not be willing to wait any longer.

“The frightening part is that once the slide starts, there will hardly be anything that President Arroyo or anybody can do to stop it. We might spend the rest of her six-year term frantically improvising from one crisis to another.

“The urgent call, then, is to prevent the start of a downtrend by acting NOW. (Actually it should have been YESTERDAY.) As I see it, the psychological deadline for a miracle is this Christmas.

“If President Arroyo cannot deliver by then, the next best thing is for her bright boys to invent some kind of big distraction. And by distraction, we don’t mean a clutch of tax bills being waved before us. Or a circus called Charter Change.”

* * *

BRIGHT IDEA: Those comments, btw, on appealing to the patriotism of Filipinos to smoke and drink to the max were inspired by another press release of Sen. Ralph Recto, who we have found to be a rich source of interesting economic stories.

The Batangas senator said tongue in cheek: “Puffing their way to 88 billion sticks a year, 23 million Filipinos smokers, many of them ostracized in public, will soon find themselves in the unlikely role as heroes who will save their government from bankruptcy.”

“Call it morbid, but in a sense, smokers will give up their lives to prevent this government from sinking,” the husband of Star for All Seasons Vilma Santos said.

“Yosi is kadiri, no question about it. It is a vice. But from a fiscal point of view, cigarette smoking becomes a virtue because it brings needed revenues to the government,” he said. (That was most enlightening! — fdp)

* * *

FISCAL SHOCK: Recto saw smokers contributing not only direct taxes. Last year, they coughed up P19.7 billion in excise tax on tobacco and an additional P4.5 billion in value-added tax, he said, adding:

“Excluding duties and corporate taxes, about P1 in every P19 tax collected in this country comes from tobacco. We hate second-hand smoke, but we welcome tobacco tax.”

“Contrary to the myth, cigarette taxes are not paid by taipans or cigarette makers, but by the people who smoke them, because excise tax and VAT are passed on to consumers,” he said.

Recto said cigarette smoking, “like a cigarette butt, should be crushed.”

He laments: “But what can we do? We have a government that is addicted to cigarette tax. It needs the latter the way a smoker craves for his nicotine-fix. If we ban cigarettes, this government will die from lack of cigarette taxes. That would be the real fiscal shock.”

* * *

INTERNET MAIL: After numerous rounds of “We don’t even know if Osama is still alive,” Osama bin Laden himself decided to send George W. Bush a letter in his own handwriting to let him know he was still in the game.

Bush opened the letter and it appeared to contain a coded message:

370HSSV-0773H

Bush was baffled, so he e-mailed it to Colin Powell. Colin and his aides had no clue either, so they sent it to the FBI. No one could solve it so it went to the CIA, and then to the NSA, then to the Secret Service.

With no clue as to its meaning, they eventually asked Canada’s RCMP for help. The Royal Canadian Mounted Police cabled the White House as follows:

“Tell the President he is looking at the message upside down.”

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(First published in the Philippine STAR of November 9, 2004)

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