He said over the last 14-years, Mrs. Arroyo and her predecessors, former Presidents Fidel Ramos and Joseph Estrada, proposed countless tax bills in their yearly SONAs.
"Some were passed, others were not, but those that were enacted into law all missed the exaggerated targets projected by the executive (branch). Why? Because it is the same BIR (Bureau of Internal Revenue) and Customs under the same structure that would collect them. And they would fail as they have failed in the past," he said.
The President, according to her budget and finance officials, would submit a number of tax bills in her SONA on Monday. Among the tax proposals that have been floated are a tax on text messages, a new fuel levy and the adjustment of the excise tax on beer, cigarettes, and other tobacco and alcohol products.
The measures are designed to reduce the budget deficit, which is estimated to hit P200 billion this year, the same level as last year.
Senator Arroyo, who is not related to Mrs. Arroyo but who supported her in the recent presidential elections, chided the President for vetoing the Congress-passed Attrition Law that she inherited from ousted President Estrada when she took over the presidency in January 2001.
He said the measure, which contained a system of reward and punishment for officials and personnel involved in collecting taxes and other levies, would have generated billions in additional revenues for the government.
"This good Erap measure was passed but the President insists on the passage of new tax measures before correcting a patently failed collection system?" he asked.
He explained that under the proposed Attrition Law, collection agencies would be given reasonable targets.
"If they miss their targets, the bosses would be relieved. On the other hand, if they surpass their targets, there would be rewards. The carrot and stick approach," he said.
The maverick senator also suggested that Mrs. Arroyo should tell the BIR, Customs and other agencies to increase their collections by at least 10 percent before submitting tax bills to Congress.
"Unknown to the public is that a 10 percent increase in our revenue collection would amount to roughly P70 billion, a hefty sum that could substantially plug over recurring budget deficit. Malacañang’s new tax proposals will not amount to raising P70 billion," he said.
He said if the executive branch could raise tax collection by 10 percent, then Congress could probably pass new revenue bills.
"But it would be sheer idiocy for Congress to enact new tax laws when the BIR and Customs would be unable to enforce them efficiently," he stressed.
The most controversial of Mrs. Arroyo’s proposals is the tax on text messages since it would hit the estimated 26 million to 27 million cellular phone users.
In place of the tax on text, some lawmakers are suggesting that a higher franchise tax be levied on telecommunications companies on condition that such levy would not be passed on to subscribers or customers.