|
HOW many
ways are there to skin the cat called value-added tax
(VAT), which, with its huge collection windfall, has
become an embarrassment to a government seeking to
cushion the impact of soaring gas and food prices on the
public?
More
options were offered Tuesday in the House of
Representatives and even in the united opposition’s
ranks, as the Executive continued to fend off calls to
lift the VAT on petroleum products and instead opted use
part of an estimated P18-billion windfall for various
subsidies to affected sectors.
The
latest scheme was embodied in House Bill (HB) 4215 filed
by PDP-Laban Rep. Teodoro Locsin Jr. of
Makati City.
He proposed Tuesday the removal of VAT on goods and
commodities that are being consumed by Filipinos on the
ground that, being basic needs, people cannot avoid
buying them and are thus hurt by the tax.
HB 4215
will drop VAT on commodities by merely deleting at
paragraphs (a) and (d) of Section 109 of the National
Internal Revenue Code.
The
proposed measure covers the VAT imposed on the sale or
importation of all professional equipment, food, wearing
apparel and all other household and personal effects.
“This is
easily done because these items are, in fact, already
exempted in the law, except for the egregious and
invidious qualification that they must be in their
original raw state,” he explained.
“In
other words, a school uniform is taxed but not the
cotton shrub which our children are expected to wrap
around themselves. School shoes are taxed but not if it
is still in its original bleeding state when it is
flayed from a cow,” he explained.
Locsin’s
bill was among the many proposals filed with the House
of Representatives as the government scramble to find
ways on how to help consumers temporarily cope with the
debilitating effects of soaring oil prices.
Locsin
said his bill should correct the situation wherein
ordinary Filipinos are being taxed while moves are being
undertaken to free big companies such as those in the
oil and power industries from paying the VAT.
“This is
a mocking insult to the common man for the economic
condition in which he finds himself and which my
proposal to remove the R-VAT from consumer items will
correct,” he said.
The
lawmaker noted the fact that the government has achieved
its VAT target and even exceeded P70 billion—partly
because, with global prices of oil soaring, the taxes on
these products rise correspondingly.
In
another development, Makati Mayor and United Opposition
president Jejomar “Jojo” Binay batted for fixing the VAT
not only on oil, but on coal, hydroelectric, geothermal
and natural gas.
This, he
said, would be the more realistic approach to lowering
the cost of electricity, rather than proposals to scrap
VAT on petroleum products altogether, which the
administration would not allow in the first place.
When the
12-percent E-VAT was first implemented, the average
world price of oil was at $30 per barrel, but it is now
at more than $130, and is projected to skyrocket up to
$200 per barrel, Binay said. Fixing the E-VAT at about
$3.60 per barrel would mean the government will not have
to forgo the revenues by scrapping the E-VAT, but at the
same time considerably lower the costs of petroleum
products and electricity.
Additionally, Binay pointed out that oil is a mere 1
percent as an energy component, with hydro representing
19.6 percent, geothermal 9.5 percent, coal 30 percent
and natural gas, 40.8 percent. The data, sourced from
the energy committee of the Philippine Chamber of
Commerce and Industry, indicates that earlier proposals
to scrap the E-VAT on oil alone would represent an
insignificant reduction in energy costs.
That is
why, he said, that proposals to fix the E-VAT or scrap
it totally would have to be applied to all the other
energy components in order to have a meaningful effect
on the present costs.
The
chairman of the House Committee on Ways and Means,
meanwhile, is eyeing a proposal that would put a cap on
VAT on oil to arrest the rise in fuel prices.
Lakas
Rep. Exequiel Javier of Antique proposed fixing the tax
on petroleum products based on the barrel price to
cushion the impact of oil prices.
Javier
said that through his proposal, the government will
revert to imposing specific tax on imported oil “to
prevent the cascading effect of VAT.”
“Since
VAT is based on price, every time the price of oil goes
up, the VAT goes up too,” he said.
The
committee chairman said the government may cap the tax
imposed at the level of VAT collected from imported oil
priced at $100 a barrel.
Through
this scheme, he said the government will be able to
maintain its tax takes and at the same time help
end-users deal with rising fuel costs.
“This is
actually a win-win situation for government and
consuming public,” he said at the end of the hearing on
Tuesday which heard various proposals on how ease the
effects of rising fuel prices.
He said
that if a 12-percent specific tax is imposed on oil
priced at $100 per barrel, the government could still
come up with a tax earning of P18.6 billion from oil.
By
placing a cap on VAT on crude, Javier said the
government will directly subsidize the consuming public.
“If we
put cap on the VAT, then that will be direct subsidy to
the people. Unlike in the case where government gets the
revenue then distributes,” he said. |
