Hunger and extreme poverty can be eradicated in 10 years.

Senator Imee Marcos’s bold statement coincided with the filing of her priority legislation this week, including a resolution to conduct an inquiry into the government’s poverty

programs, and three priority bills related to amending the country’s tax laws.

“Why is it that the Philippines has a high growth rate among ASEAN countries but we have lagged behind our neighbors like Indonesia and Vietnam in terms of poverty reduction,” Sen. Marcos asked.

Despite the government’s many poverty programs like the 4P’s (Pantawid Pamilyang Pilipino Program) and the billions of pesos that fund them, the lives of the country’s poor have remained stagnant, Marcos said.

“If we can bring Mindanao out of poverty, we will have reduced the number of poor in the entire Philippines by 40 perent,” the senator added.

In the resolution she filed at the Senate, Sen. Marcos called for an inquiry into the national poverty situation by reviewing poverty data and assessing existing poverty programs.

“The government must have a systematic way of measuring poverty reduction,” she stressed.

“Our success in Ilocos Norte owes to the specific programs and measures we have taken to put a stop to inter-generational poverty,” she said.

Tax amendments needed

The country’s tax laws also need to be amended further to make them truly responsive to the challenge of poverty reduction, Sen. Marcos added.

In three of her priority bills, Sen. Marcos sought to expand the list of goods and services that should be exempt from value-added taxation (VAT), earmark VAT proceeds to assure food security for the poor, and correct the amount of actual funding for local government units (LGUs).

“The Duterte government may have passed the TRAIN (Tax Reform for Acceleration and Inclusion) law for ease of collection, but we now must try to make it more fair,” Sen.

Marcos said.

Marcos intends to make all medicines VAT-exempt, pointing out that the TRAIN law only exempted maintenance medicine for diabetes, high cholesterol, and hypertension.

With food making up 70 percent of the poor man’s budget, Marcos also proposed to earmark VAT proceeds specifically for food vouchers and welfare programs.

Other items earmarked for funding from VAT proceeds are public schools, indigent insurance, environmental conservation, and agricultural modernization.

Just share for LGUs

An apparent conflict between the Constitution and the National Internal Revenue Code (NIRC) is one of the problems hampering poverty reduction and progress in the provinces.

Sen. Marcos pointed out the urgency of clearly defining the national taxes revenue base, so that LGUs would not be shortchanged year after year.

A clearer definition would actually increase funding for LGUs and provide them greater means to reduce what Sen. Marcos called “inter-generational poverty”.

“The NIRC pegs it at 50%, while the Supreme Court has ruled and upheld the Constitution which says it should be 60% of tax revenues,” she explained.

The computation of the tax base for LGU allotments has relied on a misnomer that must be renamed.

“The acronym for internal revenue allotments, or IRA, is not an accurate description of what the tax base should be,” Marcos said.

“I propose to rename the IRA to NTA – National Tax Allotment, which reflects what the Constitution says and what the Supreme Court has upheld,” she explained.

“It is not a mere quibbling with terminology. It more clearly describes the rightful share from taxes of all local government units, which should be 60 percent,” the senator said.

Other VAT-exempt items

The cost of school supplies and of schooling itsef can be cheaper, as Sen. Marcos also sought to exempt the services of both state and private-run schools from VAT.

As long as private educational institutions are duly accredited by the Department of Education, Commission on Higher Education, or the Technical Skills and Development

Authority, such schools should be able to avail of VAT exemptions, Sen. Marcos said.

The expense of running schools, passed on to students, can be reduced if all suppliers and service providers of educational institutions would also be exempted from VAT charges, she added.

The senator expressed dismay over the cost of school supplies that year after year flout the government’s suggested retail prices (SRPs).

The VAT exemptions intend to reduce the cost of education for low-income families and to give them “a real chance to escape the spiral of hand-to-mouth existence,” Marcos explained.

The importation, printing, and publication of books are also in the list of VAT-exempt goods, as well as school paper products consumed by students and teachers during the school year.

All these education-related measures complement the law signed by President Rodrigo Duterte granting free college tuition.

“If free higher education is to be truly sustainable, we must exempt other educational expenses from VAT,” Marcos said.

Cheaper electricity

Removing VAT charges on the sale of electricity and on the sale or importation of equipment and machinery directly used for power generation, transmission, and distribution is also expected to lower consumer costs.

“Small and medium enterprises would welcome this boost to their businesses,” Sen. Marcos said.

Even newspapers, magazines, reviews, or bulletins count among the proposed VAT-exempt goods, as long as they are sold or subscribed to at regular intervals and are not mainly devoted to publishing paid advertisements.