MANILA, December 29, 2004
(STAR) By Marichu Villanueva - President Arroyo formally asked both chambers of Congress yesterday to conduct special sessions on Jan. 5, 6 and 7 to work on the approval of the Lateral Attrition bill and other revenue mobilization measures certified as urgent by the Palace.

Mrs. Arroyo took lawmakers’ offer to cut short their Christmas break and resume session before Jan. 10. She signed yesterday Proclamation 752 calling Congress to a three-day special session next week.

The move is meant to signal to international credit ratings agencies like Fitch, Moody’s and Standard & Poor’s that the Philippine government is determined to put its fiscal house in order at the soonest possible time by passing into law the administration’s tax reform package in Congress.

Mrs. Arroyo specifically asked Congress to approve during their three-day session the bill providing "for optimum performance in revenue collection through the grant of special rewards for exemplary services as well as lateral attrition in revenue-generating agencies of government."

Presidential political adviser Gabriel Claudio earlier disclosed that Mrs. Arroyo decided not to call special sessions for the rest of the year after consultations with Senate President Franklin Drilon and Speaker Jose de Venecia.

"There was sufficient consultations with Congress leaders in making this call for special sessions next week," Claudio told The STAR. "Anyway, this is taking place at the tail end of their (Christmas) recess so that legislators who are still on vacation will not be inconvenienced."

In issuing Proclamation 752, Mrs. Arroyo invoked her powers under Article VI, Section 26 (2) of the Constitution to call Congress to a special session to consider bills "toward improving the country’s fiscal position."

Aside from the Lateral Attrition bill, Claudio said Congress would also tackle "revenue mobilization measures as prioritized by the Legislative-Executive Development Advisory Council and those signed as ‘urgent’ by the President."

The Lateral Attrition bill is one of the eight tax measures under the fiscal reform legislative agenda that Mrs. Arroyo endorsed to Congress for immediate approval to help generate an additional P80 billion for the deficit-strapped government.

The bill was already approved on third and final reading by the House of Representatives and the Senate and is currently being taken up by the bicameral conference committee of both the Senate and House ways and means committees.

Three versions of the bill are being consolidated by the bicameral body — the Congress-approved Attrition Law vetoed by Mrs. Arroyo in 2001, the Senate and the House versions.

The approval of the Lateral Attrition bill would follow the enactment of the so-called "sin" tax bill, which was approved by Congress and signed into law before the lawmakers adjourned for their Christmas break last Dec. 17.

Forgoing ceremonial signing rites, Mrs. Arroyo immediately signed the "sin" tax bill into law as Republic Act 9334. According to her economic managers, the new law can generate as much as P15 billion in additional revenues for the government.

The proposed Lateral Attrition bill, on the other hand, is not a revenue measure but seeks to provide a reward and punishment scheme to all personnel of tax collecting agencies such as the Bureau of Internal Revenue and the Bureau of Customs.

For meeting or exceeding their tax collection targets, an incentive or reward scheme is proposed while those who cannot meet their targets will be meted penalties.

Reported by: Sol Jose Vanzi

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