Individual legislators, legislative committees, and tax policymaking II

Posted: January 2, 2011 in Candidate-centered polities, CTRP, Legislative committees, Legislators, Legislatures, Philippine politics, Political institutions, tax reform, Taxation

This blog entry will illustrate the inordinate power and influence of legislative committees and powerful individual legislators in the policy process.  In the case of tax policymaking, the officials and members of the House and Senate Ways and Means Committees would wield this disproportionate power relative to their respective legislative majorities.  Comparatively speaking, officials of the House Ways and Means Committee wield disproportionate power vis-à-vis ordinary committee members and non-committee members on tax policy matters relative to the Senate Ways and Means Committee.  Because of the small number of senators (24), the Senate Ways and Means Committee may already constitute a built-in super-majority than can ensure passage of the committee report in the Senate plenary floor.  On the other hand, the larger number of House members and the larger size of the House Ways and Means Committee allow committee officials greater leeway in the tax policy making process.

Table 1

 Number of ‘bicam’ conferees that were not Ways and Means Committee members, major tax laws of the Ramos presidency


  RA 7654 RA 7716 RA 8184 RA 8240 RA 8241 RA 8424
House of Representatives 0/11 1/10 3/10 2/13 5/12 5/20
Senate 0/7 1/7 0/8 1/6 0/5 2/7
Percentage share of non-members 0 11.7% 16.7% 15.8% 29.4% 25.9%


 As shown in Table 1, members of the Ways and Means Committees of both chambers numerically dominated all of the Bicameral Conference Committees formed to reconcile the differences on all major tax laws passed during the Ramos presidency.  The dominance of Ways and Means Committee members in the bicameral conference process was not uniform across the six major tax laws.  Their influence was relatively weakest during the deliberations of the more controversial tax measures, RA 8241 (or the improved VAT law) and RA 8424 (on individual and corporate income taxation).  Though also contentious, the influence of committee members was stronger for RA 8184 (on petroleum product taxes) and RA 8240 (on ‘sin’ taxes) and almost dominant during the 9th Congress that deliberated on RA 7654 (on cigarette taxes) and RA 7716 (or the expanded VAT law).


If we consider the identities of the bicameral committee conferees (as shown in Table 2), the influence on individual legislators on the tax policy process would be clearly perceived.  This influence is most perceptible for individual members of the House of Representatives.  Playing key roles were the officers of the House Ways and Means Committee who served in that capacity in both the 9th and 10th Congress.  They include Rep. Exequiel Javier, who served as Committee Chairman during the entire Ramos presidency, and Reps. Renato Diaz, Mariano Tajon, Catalino Figueroa, and Jerome Paras, who were committee vice chairmen during the same period.  Rep. Ramon Bagatsing, Jr., Raul del Mar, and Eric Singson were committee members for both Congresses.  Singson, for one, may appear to be an ordinary member of the Ways and Means Committee. He however brings with him the clout of being vice chairman of the powerful Appropriations Committee. In addition, he was the acknowledged leader of the Northern Luzon Alliance, a powerful voting bloc composed of legislators from the tobacco-producing provinces.  Tajon is also a key figure in the tobacco alliance.  The particularistic activism of Singson on behalf of the tobacco industry and his constituents was alluded to earlier in Chapter 5 when he tried to remedy RA 8240’s infirmities harmful to Fortune Tobacco.  In addition, his only attendance and active participation in the bicameral process for RA 8424 was his plea that a new section be inserted in the National Internal Revenue Code (NIRC), which shall embody a section in RA 7171 on special financial support to beneficiary provinces producing Virginia tobacco (Bicam TCM, 29 October 1997).


Some individual legislators served as conferees despite being non-members of the Ways and Means Committee.  For instance, Rep. James Chiongbian was not a member of the Ways and Means Committee but he was a conferee to both the expanded and improved VAT laws.   It is apparent that he participated in the bicameral deliberations as an interested and affected party.  The Chiongbians were heavily involved in the inter-island shipping industry and shipping was one of the sectors debated by lawmakers for VAT exemption.  The participation of other non-members of the Ways and Means Committee could also be explained.  Rep. Marcial Punzalan, Jr. joined the Bicameral Conference Committee for RA 8184 since he was the principal author of HB 72, the original House measure on petroleum product taxation that was eventually substituted by the final House version, HB 5550.  Rep. Enrique Garcia, Jr., who was a former official of a petroleum product company, expressed great interest and expertise in oil industry deregulation and the related taxation issues, and was therefore drafted for the bicameral committee of RA 8184 that governed taxation of oil products.  Garcia was also a key member of the powerful House Appropriations Committee and he most likely brought that clout to the bicameral conference of RA 8424. 


The same is true for Rep. Arnulfo Fuentabella, who was a conferee for RA 8241 and RA 8424 even if he was no longer an official of the Ways and Means Committee during the 10th Congress.  Fuentebella, however, was a Ways and Means Committee vice chairman during the 9th Congress and was a key member of the Appropriations Committee during the 10th Congress.  His seniority and expertise were the most likely reasons why he became a bicameral conferee in two occasions during the 10th Congress despite his non-membership of the Ways and Means Committee.  Expertise in tax matters appears to be the strongest suit for Rep. Margarito Teves.  Teves served as member of the House Ways and Means Committee during the 9th Congress.  However, he did not become a conferee to the bicameral process during that period.  During the 10th Congress, he was no longer a member of the House Ways and Means Committee.  However, he still managed to become a conferee in three occasions during the same period.  Reps. Antonio Diaz and Amadeo Perez, Jr. bring with them the cachet of being vice chairman of the House Appropriations Committee during the 10th Congress.  In effect, the only featherweights who became conferees were Reps. Leopoldo San Buenaventura and Zoilo de la Cruz, Jr.  De La Cruz, who was sectoral representative for labor during the 10th Congress, attended the Bicameral Conference Committee meetings for RA 8424 only once.  The only time he attended was on 17 November 1997; however, the meeting was cancelled because Sen. Juan Ponce Enrile was rushed to the hospital.  De la Cruz’ participation was therefore effectively limited to affixing his signature to the Bicameral Conference Committee report.  San Buenaventura, meanwhile, had a slightly meatier role than De la Cruz.  He co-authored House Bill 5881, an innocuous bill that sought to promote tax consciousness; HB 5881 was among the several bills that were substituted by HB 9077, the House’s final version of the income tax bill.


The populist predispositions of some legislators were revealed during the bicameral process for RA 8424, the tax law for individual and corporate income.  Reps. Manuel Roxas, Felicito Payumo and Raul del Mar initially dissented with the bicameral conference committee report as they insisted for a higher personal exemption level.  However, other conferees that were initially absent during the initial signing of the committee report began signing the same such that it was deemed approved.  The three started changing their minds fearing they would be associated with an unpopular and losing position.  Defeat of the committee report would mean return to a status quo of a much lower exemption level.  Their change of heart was no longer necessary at the time it was made since a sufficient number of signatures were gathered to approve the committee report.  The three however found it necessary to change their votes and be on the winning side.  Roxas even delivered a privilege speech to explain his turnaround.  These changes were accepted even as opposition legislators questioned if they were allowed by the House rules. 


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