Senators divided on imposing taxes on single-use plastics, online transactions

Several senators have weighed in on the Department of Finance's (DOF) proposal to impose taxes on single-use plastics and digital transactions.

In a text message to reporters, returning Senator Francis "Chiz" Escudero said the government must first address the problems in revenue collection,  including the issue of corruption and inefficiency in the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR), instead of imposing new taxes amid an economic crisis.

"It's always easier to go for imposing new, or increasing whatever existing, taxes in order to raise revenues for [the government]. However, this is burdensome and is not in keeping with the times (of slow economic growth, increased unemployment and rising inflation)," he said.

"I think the first order of business for the new Finance Secretary is to plug loopholes, clean up and make collection of existing taxes and duties by the BIR and BOC. With nearly ?200 [billion] in uncollected taxes lost to either corruption and/or inefficiency, this is by far more than any projected revenue of the new taxes he is mulling," he pointed out.

Administration Senator Ramon Revilla Jr. said he will refile a resolution urging the Senate Committee on Ways and Means to conduct an inquiry on the possibility of imposing and collecting taxes from multi-national online streaming services.

Revilla said it is unfair for local businesses that they are obliged to pay taxes while multinational firms are not covered by tax laws.

"Unfair din kasi na yung mga local online businesses covered ng taxation laws, ang mga multinational corporations who have less physical presence but wider reach, mukhang hindi naaabot. They may have to be properly taxed given the outdated provisions and leakages in tax measures," Revilla said.

He said that other "technologically-advanced" states such as Norway, Australia, Japan, France, South Korea, United Kingdom, Singapore, and Malaysia have digital service tax laws.

"It is good Sec. Ben Diokno and the Finance Department [are] looking into it now. As I said before, there is a need to embrace existing conditions, and to comprehensively review and update our existing tax laws regarding digital economy," he said.

"Ang mga revenue [na] galing dito [the revenues coming from here] can help finance the national economic recovery plan, lalo na ang pag-angat ng buhay ng ating mga kababayan [especially improving the lives of our countrymen]," he added.

For Senator Sonny Angara, goods and services which are purchased through the internet should really be covered by the 12% value added tax unless the law exempts it.

"Goods and services bought through the internet should really be taxable for VAT as all goods and services are, unless expressly made exempt by law," he said.

Angara also expressed support for the imposition of new duties on single-use plastics as this will also promote the use of recyclable materials.

"I am also in favor of taxing plastic as is the practice in other countries. This is intended to incentivize or encourage the use of recyclable bags and materials, which is better for the environment," he added.

Like Angara, Senator Grace Poe has no problem in subjecting these single-use plastics to new taxes.

"The rampant use of single-use plastics is detrimental to our environment. Taxing them can discourage its use and even encourage the use of locally available materials for packaging. I have no problem with it," she said.

On the other hand, opposition Senator Risa Hontiveros said she will not oppose the idea of imposing new taxes to both single-use plastics and digital transactions even if these proposals are yet to be considered substantively in the Senate.

"A lot of real world face-to-face sales of goods and services are migrating to online platforms, but ideally that should not really matter in terms of their tax treatment. If Congress deemed it legitimate to either tax or exempt certain products and services when they were not yet online, it must make sense for them to be treated the same when they go online," she said.

"If there will be a counter measure in the Senate, it will be subjected to deliberation and changes. This is an opportunity for us to resolve conflicting matters for the benefit of Filipino merchants and consumers," she added.

Meanwhile, Hontiveros said a tax measure on single-use plastics will be consistent with her bill which bans the use of it.

"I filed a bill banning the use of single-use plastic straws and stirrers in food service establishments, as well as a bill that will make producers responsible for plastic wastes," she said.

"Single-use plastics are a hazard to the environment, to the fish stocks of the region and to livelihoods.  The question that should be carefully answered is that, do the advantages outweigh the risks? Baka sa dulo ay mas marami ang mawalan ng kabuhayan dahil sa panganib na dulot ng paggamit nito," she added.

Last week, Finance Secretary Benjamin Diokno said they are looking into recommending the passage of legislation to tax single-use plastics and digital transactions. — RSJ, GMA News