GMA dared to collect revenues from sources other than VAT


By Aurea Calica
Wednesday, July 30, 2008

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Opposition and administration senators, including those with known presidential ambitions, challenged President Arroyo yesterday to improve revenue collections from sources other than the value-added tax on oil and set a deadline for ending the government’s dependence on the unpopular tax measure.

The lawmakers recalled that Congress made a tough choice when it granted Mrs. Arroyo’s request for the approval of the Reformed VAT Law despite her own dilly-dallying when her critics raised the issue before the Supreme Court.

The VAT, they said, was originally intended to address the fiscal crisis shortly after her election victory in 2004 and not to serve as permanent solution to the country’s woes, including revenue collection shortfalls.

The senators said they could not believe Mrs. Arroyo now considers the measure the be-all and end-all of her fiscal management amid the fuel and food crises.

Senate Minority Leader Aquilino Pimentel Jr., Edgardo Angara, Ramon Revilla Jr., Benigno Aquino III as well as those reportedly eyeing the presidency in 2010 like Senate President Manuel Villar Jr., Panfilo Lacson, Manuel Roxas II, Loren Legarda and Francis Escudero, said they would continue to push for necessary measures that would be more responsive to the needs of the poor in the face of the President’s warning to “let no one’s political plans threaten the nation’s survival.”

“Because senators are calling for the reduction or scrapping of VAT on fuel, that is her way to counter them, by just saying it is part of our agenda for 2010 since it is a popular call, it’s for the masses,” Lacson said.

The senators said they were hoping to hear policies and programs, even not very detailed, on how the country could move forward.

Villar said senators are prepared to file appropriate measures to help address the problem even without getting direction from the President in her SONA speech.

Escudero, Roxas and Legarda cited Mrs. Arroyo’s alleged helplessness in tackling the problem or how she plans to improve the country’s collections to further alleviate the plight of the poor.

Escudero, who chaired a hearing on smuggling yesterday, said he could not understand how Mrs. Arroyo and her people could not collect the necessary taxes and duties that end up in the pockets of smugglers and tax evaders. He said these funds would be more than the VAT collections that Mrs. Arroyo stubbornly defends.

“What happened yesterday was not a SONA but a hundred reasons why VAT on oil should continue,” Roxas said. “Why was VAT on oil the center of the President’s and the government’s whole program, while it’s only a decimal point of the whole budget?” he said.

“The government must make a sacrifice by removing VAT on oil, improving collection of taxes and duties, and plugging the leaks in government spending. That’s the ‘tough decision’ that the government has yet to make,” he stressed.

Revilla said while he would want the abolition of the 12-percent VAT on oil, a two-percent reduction would be enough to help the people.

Legarda said the continuous dependence on oil “reaffirms the structural weakness of the economy.”

Pimentel and Lacson also belied the President’s claim that only the rich would benefit from the scrapping of VAT on oil since all sectors were affected by high fuel prices.

Aquino, for his part, recalled it was Congress who helped Mrs. Arroyo push fiscal reforms.

“And because of her subsidies, we have to see what essential programs are being sacrificed, like for example agriculture because we want to have adequate rice supply and food security,” Aquino said.

Angara, meanwhile, said there should be alternatives to cushioning the impact of high prices but stopped short of calling for VAT scrapping. – With Marvin Sy, Jose Rodel Clapano and Iris Gonzales

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