House cool to lifting VAT on oil products

This is a re-posted article.

MANILA, Philippines – The House of Representatives is not inclined to lift the 12-percent value added tax (VAT) on oil products, Speaker Feliciano Belmonte Jr. said yesterday.

“I don’t think it’s going to get anywhere,” he said, referring to the proposal to temporarily scrap the oil VAT.

“We are having a problem on oil now principally because of the crisis in Iran. But this is really an up-and-down thing. Now on the other hand, VAT is something that has been found beneficial all over the world and we are wishing that we can get back on it,” he said.

He pointed out that VAT is one of the government’s principal revenue sources.

“It is not earmarked for any particular link. It goes into the general fund and the government can do a lot of things with it. For instance, last year, 2011, everybody concludes that we underspent. That’s not true. We actually spent more. We spent more money in 2011 than in 2010,” Belmonte said.

“This year, we are off to a rousing start, so that even if January was a record with the collection, there was a deficit, a substantial deficit, because the administration is fast-tracking fund releases. It wants to get the money out during the summer,” he added.

Economics professor Benjamin Diokno, a former budget secretary, has urged the Aquino administration to lift the oil VAT while crude prices are high.

On the other hand, Sen. Ralph Recto, principal author of the VAT law in the Senate, has proposed that the tax be reduced to 10 percent.

There are several bills pending in the House to bring down the cost of oil products and electricity.

According to the World Bank, the government has to reduce the cost of electricity to attract foreign investments and sustain its modest economic growth.

It said electricity rates in the country are one of the highest in Asia, if not in the world.

Bayan Muna Rep. Teddy Casiño has lamented that while people continue to suffer from high power cost, companies engaged in producing, transmitting and distributing electricity have been raking in tens of billions in net profits.
==============================================================================
By: Jess Diaz
Source: The Philippine Star, March 26, 2012
To view the original article, click here.

Subscribe to the Arangkada NewsRoom via RSS

Subscribe to the Arangkada NewsClips