Press Release
June 2, 2006

Transcript of interview with Sen. Ralph Recto

(Dun sa budget, ano sa tingin nyo ang mga items that would trigger intense debates?) Ang tingin ko the Senate missed a golden opportunity in the budget. Ang daming pangangailangan na classrooms, halimbawa, there are 7,000 classrooms shortage. The Senate didnt address that. That was a missed opportunity among other things. So I hope that we are able to restore that. I dont know if it was slashed, but we should have at least improved on the budget. So maybe we can still take that up in the bicam.

(Are you thinking of any amendment?) I think we shld address the classroom shortage, yung doctor ng bayan program, vaccination of children. Iyung mga ganon dapat lagyan natin ng dagdag na pondo. Possibly we would be able to hire more teachers, or para sa teachers training. Mahalaga yon if we want to improve literacy, functional literacy, productivity of labor. We dont need to give these incentives na pinag-uusapan natin if our labor was productive, if our workforce was more literate and more productive. Theyre all related to improving the economy.

Im hoping that we will be able to pass the budget before sine die. This budget naman is better still than a reenacted. But we could improve it much more.

(Kelan schedule ng bicam?) I think wala pa. Baka Monday because I dont think the House has been able to elect their bicam members already. Wala pa yata.

(Your reaction on attempt on life of Batangas Gov. Sanchez?) Sa palagay ko dapat imbestigahan ng PNP lahat ng posibleng anggulo- maging politila iyan or negosyo. Pag-aralan nila lahat at kung sinong may sala ipakulong. (Marami daw kaaway si Sanchez?) Iyon ang bali-balita ko rin pero di ko alam kung sino. Its very unfortunate that this thing has to happen in Batangas. Hindi naman ganoon ang politika sa amin. But Im glad that hes out of danger. Mabuti na lang. Pero nakakalungkot na may 2 namatay at may ibang nasugatan siguro. (Yung lawyer ni Sanchez medyo insinuating ang statement na sino ba ang akikinabang sa death ni Sanchez.) I dont know. Its hard for me to comment on that. Pero ang tingin ko gawin ng mga pulis ang trabaho nila. Gawin ng provincial director at ng regional director ang trabaho nila, alamin nila kung sinong may sala dito.

(Sir, re. iyung iba pang ibang revenue measures na pending sa committee nyo?) We will come out w/ a report next week. Monday. Were 90-95% done. Mahaba ito. These are very complicated measures. So 1 word could spell the difference. Were double-checking everything. (How about the individual income tax?) Meron na rin kami. Bottom line, were waiting for the final simulations. Were having many simulations run by the DOF, but yes, we will continue the policy of a flat tax rate and an exemption level, to make it easier for the taxpayer to pay his taxes, easier for the employer to withhold taxes and remit the same.

(There are some economists who say that a flat tax is not progressive.) It can be progressive. (But not progressive enough daw kasi if you shift from the 7 brackets we have now to a flat tax) It all depends on the level of exemption. you can make it very progressive but how much will be your revenue loss? I can give an exemption to 90% of the people but how much is your revenue loss? (Will the middle class bear the burden?) No, not necessarily. It depends on the level of the exemption and your definition of the middle class. Remember maraming hidden income din yan. In the tax code, for income taxes alone, there are at least 25 variables. Imagine w/ a flat tax, I can limit the 25 variables to 10. I can limit it to 2 kaya lang masyadong radical change na yon. Masyadong ideal yon.

(So hinahanap nyo na lang yung tamang timpla?) Oo yung final na timpla.

(May proposal na bigyan ng dagdag na ngipin ang BIR to go after legislators not declaring their real net worth.) Na hindi nagbayad siguro ng tax kasi BIR ang trabaho sa tax. Palagay ko tama lang gawin yon. Dito sa Senate, 2nd ako sa pinakamayaman. O,makikipusta ako na kaming 2 ni Vilma ang may pinakamataas na binayad noong nakaraang taon. Baka siguro sa data ko sa committee ko na nakita ko, hindi ako maggugulat kung nasa top 10 kami ng nagbayad ng buwis noong nakaraang taon. Sa 85 million Filipinos, palagay ko nasa top 10 kami ni Vi, o number 1 pa sa Senado siguro. Posible. Basta ang minimum na binayaran naming noong nakaraang taon P10 million. Hindi pa kasama yung kay Lucky doon. Siyempre karamihan ng may binayad don si Vi. Mas malakas naman talaga ang kita niya dahil may 2 commercials yata siya last year.

(Do you agree with Teves to retain their targets dun sa tax goals?) Sa totoo lang, I think overstated ang targets ng BIR, understated ang targets ng BOC. Kasi kung tutuusin mo, ang lahat ng increase ng BOC gawa ng VAT on oil at lahat ng iba flat. So ang growth nila talaga sa oil lang. (So its unfair for BIR?) Im not saying that. All Im saying is that 25% target for BIR was really very high. Tingin ko 20% is good enough. But okay lang naman sa akin. The higher the target, the better para makita natin kung hanggang saan kaya. (Mas realistic ang 20%?) Parang ganon ang tantya ko, tapos sa BOC dapat mas malaki kasi karamihan ng VAT reform ay talagang nasa BOC. Importation ng petroleum. Thyen maraming issue pa diyan. Halimbawa, pag nagbenta ng yung treasury, yung BSP, binabayaran ba nila o hindi. Part of the shortfall is that e. Hindi naman nire-remit ng Treasury yung BSP sa BIR dahil ibabalik din sa kanila yon. So bibilangin mo ba dapat iyon or hindi.

(Kapag nakita ng oversight na mali ang paggamit ng compromise ng BIR commissioner, ano ang punitive measures?) Pwedeng pag-sabihan ng oversight committee. We report that to the plenary. The law is already very clear. You can only compromise basta may certain conditions sa law. Pag hindi na-meet ang conditions di pwedeng mag-compromise.

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