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Purisima gets global award for 'unforgiving' campaign vs tax evasion

Finance Secretary Cesar Purisima has been lauded by the prestigious Euromoney magazine for a take-no-prisoners campaign to combat tax evasion in the Philippines. Among the prominent targets for tax investigations have been boxing icon Manny Pacquiao and former chief justice Renato Corona and his family. In its Finance Minister of the Year 2012 citation, Euromoney said, “Purisima has unleashed an unforgiving strategy to combat tax evasion and maximize revenue from corporates without introducing any new taxes or reforms. “Purisima has worked closely with President Benigno Aquino to champion the idea that ‘good governance is good economics’. Bankers in the country say he has stuck to his guns, and the country is reaping the rewards." Purisima was presented the award while in Tokyo for the International Monetary Fund-World Bank meetings.   “I’d like to especially recognize Internal Revenue Commissioner Kim Henares who has the unenviable task of collecting almost a trillion pesos in taxes to finance government priorities, as well as Budget Secretary Butch Abad who has the equally unenviable task of selecting which among the many priorities we will finance,” Purisima said upon accepting the Finance Minister of the Year award from Euromoney. Sin tax battle   Now Purisima faces a tough battle on the sin tax bill, which aims to boost government revenues by substantially increasing taxes on tobacco and alcohol. Henares and Abad, the colleagues he cited in his accpetance of the award, also happen to be his key allies in getting Congress to reform the “sin tax” system for tobacco products, beer and liquor.   Their efforts to raise up to P60 billion in recurring sin tax revenues came  under threat in the past week when the Senate ways and means committee led by Senator Ralph Recto approved a sin tax bill that fell far short of revenue expectations and elicited dismay from the Executive and even brickbats  within the Senate.   “I had hoped that I would not be disappointed. But I was ready to be disappointed. I was involved in many reform measures. This one is 14 years in the making. This is one of the most difficult reforms. I had hoped that it [the Senate’s version] will be different,” Henares said.   Whether Aquino’s finance chief will be forgiving of the administration’s supposed allies in the Senate may be seen when he returns to Manila from Tokyo.   “I thank the House of Representatives for working double-time to secure the passage of this bill, vital for its potential contribution not only to state revenues, but more importantly to promoting healthy lifestyle to Filipinos,” Purisima said back in June when House Bill 5727 was approved in the larger chamber of Congress.   “Moving forward, we call on our dear senators to ensure the passage of HB 5727 into law within the year keeping in mind the welfare of the Filipino people,” Purisima added.   He has often said that “good governance is really good economics,” but the harvest pace of the fruits of his and other Aquino officials’ labors has not been as fast as some hoped it would be.   Passage of the sin tax bill was arduous in the House of Representatives and while that happened all the Senate could do was wait because all revenue measures must first emanate from the House as the 1987 Constitution requires.   International credit rating agencies and countries that export tobacco products, beer and liquor to the Philippines have been closely monitoring the progress of the sin tax reform efforts.   British American Tobacco (BAT) has been urging the Philippines “to level the playing field” by not discriminating between foreign and local brands through different product classifications and varied tiers of tax rates.   “Through the sin tax reform process, the Aquino Administration has taken a bold and courageous step to fix these inequalities,” BAT said in a statement.   The credit rating agencies keep track of the sin tax bill because of its potential revenue impact. The Malacañang version of the bill sees P60 billion in tax collections, but the current Senate version could rake in only one-fourth of that or P15 billion.   Another economic program under close watch is the public-private partnership (PPP) program, which has so far awarded only three contracts—one for a road project south of Metro Manila and two for the build-lease-transfer of 9,301 classrooms.   The PPP Center told GMA News Online right after the contract signing for the classrooms that two more priority projects are pending before the governing board of the National Economic and Development Authority and would be acted upon as soon as that board convenes again.   President Aquino had earlier identified eight PPP projects for priority action.   Some finance executives in the private sector attribute the current pace of the PPP to the strivings of incumbent officials to make sure that the good governance efforts will last beyond 2016, when Aquino’s single term ends.   Purisima led the accounting and management consultancy firm Sycip, Gorres & Velayo before then President Gloria Arroyo asked him to join her administration first as trade secretary and then later in the finance department. — Earl Rosero/ HS, GMA News