Archive for the ‘RVAT’ Category

Scientist Group Calls Anew for Scrapping of EPIRA, VAT amid the Power Rate Hike

October 30, 2008

With the impending 36 percent hike in electricity rates, AGHAM, an organization of scientists and technologists, called anew for the scrapping of the EPIRA or the Electric Power Industry Reform Act, and the VAT on electricity.

BY BULATLAT

The AGHAM (Science and Technology for the People), an organization of scientists and technologists, has called anew for the scrapping of the Electric Power Industry Reform Act (EPIRA).

Dr. Giovanni Tapang, AGHAM national chairperson said that as long as EPIRA allows the passing on of the costs and losses of distribution utilities and generation plants to the people, the rate of power would continue to increase.

The adjusted Manila Electric Company’s (Meralco) rates recently approved by the Energy Regulatory Commission (ERC) on its average distribution, supply and metering charges bode of a 36-percent power rate increase for consumers.

Tapang said the ERC’s ‘alphabet soup of recovery mechanisms’: Generation Rate Adjustment Mechanism (GRAM), Currency Exchange Rate Adjustment (CERA), Deferred Accounting Adjustment (DAA) result to increases.

Not the end

“These increases are reflected on the distribution utility charges and it is not yet the end of power rate increases. Come three months hence, NAPOCOR (National Power Corporation) and Meralco would apply for another adjustment for their generation rates on top of the current rate hike. As the economy sinks, we will be facing a never ending spiral of price increases allowed by the ERC under the EPIRA”, said Dr. Tapang.

The continuing privatization and deregulation of electric power by the EPIRA run counter to the interests of the Filipino people. It has only made electricity inaccessible due to ever increasing costs, Tapang pointed out.

“Like a gun pointed at our heads, there seems to be no escape from the barrage of increases coming from Napocor and Meralco. Electricity is used daily in our activities, yet the ERC, NAPOCOR, MERALCO and the Arroyo government seem unconcerned about the heavy impact these increases have in our lives”, noted Dr. Tapang.

VAT

Dr. Tapang said the Arroyo government should also be held accountable for the continuing Value Added Tax (VAT) imposed on electricity rates. He said that removing the VAT would immediately lower electricity rates by around 10 percent.

Repeal EPIRA

Tapang maintained that Congress, especially the Committee on Energy chaired by Representative Mikey Arroyo, should seriously consider repealing the pass-on provisions of the EPIRA or to scrap the law altogether.

He said they should instead pass House Bill 3010 or the proposed measure seeking to repeal Republic Act 9136 or the Electric Power Industry Reform Act (Epira) sponsored by Anakpawis, Bayan Muna and Gabriela.

“The people will always remember that it was Gloria Arroyo who pushed the EPIRA law into force and that she is the main implementor of the liberalization of the power industry. The EPIRA has not brought any relief to the people and this

Lifting of Oil Vat Could Have Mitigated High Inflation — Ibon

September 7, 2008

As inflation in the country rose to its highest in nearly 17 years, independent think-tank IBON Foundation says that while unavoidable, inflation could have been moderated if government had not insisted on taxing the people through the oil value-added tax (VAT).

The National Statistics Office reported that high fuel costs drove the inflation rate to a 12.5% high in August. According to IBON, the removal of VAT on oil would have immediately brought down the cost of fuel prices by 12 percent. Pump prices are estimated to go down by P4 a liter and liquefied petroleum gas (LPG) by P60 per 11-kg cylinder without the VAT on oil. These could have brought immediate relief to millions of Filipinos through savings on their fuel bills, while bringing down production costs of fuel-intensive establishments.

High prices of commodities could also have been mitigated if government had not surrendered control over the oil industry by maintaining oil deregulation.

Inflaton bears most heavily on the poor who already struggle with record joblessness and falling incomes. But government continues to implement the RVAT in its obsession to reduce the budget deficit and continue servicing its public debt. For the people, however, all these have only meant higher prices and drastic cuts in income, consumption and welfare. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

Students to Save P710 a Month if VAT is Scrapped

August 21, 2008

A youth group revealed that an average college student would save at least P710 ($15.805) every month if the value-added tax (VAT) on products and services were scrapped.

BULATLAT
Vol. VIII, No. 28, August 17-23, 2008

A youth group revealed that an average college student would save at least P710 ($15.669 at an exchange rate of $1=P45.31) every month if the value-added tax (VAT) on products and services was scrapped.The Youth for Accountability and Truth Now! (Youth ACT Now!) recently launched its nationwide campaign for the removal of 12 percent VAT on basic consumer goods. Entitled ‘SUMA-TOTAL: Do the VAT Math’, Youth Act Now aims to “reach out to the broadest spectrum of the youth sector to explain how the VAT burden affects them. ’In a statement, the group said, “To justify continuous VAT collections despite growing public outrage, [Mrs. Gloria Macapagal] Arroyo attributed infrastructure investments, government subsidies and economic programs to revenues acquired through VAT collections. We beg to disagree.” Alvin Peters, Youth ACT Now! spokesperson maintained that VAT impositions on power and petroleum products as well as the 12 percent mandatory VAT collection on almost all consumer products are a burden to Filipinos. Peters presented their group’s computations.

Items

Monthly basic expenses

12% VAT

Food/ 3 Meals [P150/day]

P4,500

P540

Cellphone Load

1,000

120

School Supplies

294

35.28

Ballpen [P6 each, 4 pcs]

24

Notebook [P30 each, 3 pcs]

90

Yellow pad

40

Folder, envelope [P15/set, 4x/mo.]

60

Bond paper [P20/pack, 4x/mo.]

80

Toiletries

107

12.84

Soap

22

Shampoo

38

Toothpaste

27

Toothbrush

20

TOTAL

P5,901

P708.12

Peters said that the P708.12 ($15.628) VAT collected from an average college student per month is equivalent to food for five days, school supplies for two additional months, toiletries good for six more months, two weeks’ worth of transport fare, a book, or more funds for photocopying needs and almost half of a month’s cost of bed space/boarding house rentals.

He said that the amount excludes indirect VAT passed on to students through transport fare, printing, internet and boarding house rentals. He said that the VAT on oil and electricity are passed on to students who avail of these products and services.

Youth ACT Now’s SUMA-TOTAL campaign is spearheaded by the alliance’s member organizations namely, the National Union of Students of the Philippines (NUSP), College Editors Guild of the Philippines (CEGP), Kabataang Pinoy, Student Christian Movement (SCM), Liga ng Kabataang Moro, Youth Revolt, Anakbayan and League of Filipino Students (LFS). Bulatlat

Asec asks war vets to support VAT

August 19, 2008

LA TRINIDAD, Benguet — Office of Veterans Affairs Assistant Secretary Jesus Terry F. Adevoso, who is in town Friday for the 63rd Anniversary of Benguet Liberation, urged war veterans and their respective families to take a position on the proposal to remove Value Added Tax (VAT) and Expanded Value Added Tax (E-VAT).


AGED, ALIVE AND KICKING. Benguet veterans, mostly in their eighties, flash wide smiles as Gov. Nestor Fongwan greeted them saying a provincial resolution grants them, or their kin, burial benefits. The vets celebrated the 63rd year of the province’s liberation on August 15. Photo by Lyn V. Ramo/NORDIS

Adevoso quipped the P7 billion paid in pension arrears to war vets and their widows came from the taxes added on the cost of most consumer products.

“Saan kukuha ang gobyerno ng ipambabayad sa mga utang nito sa inyo kung aalisin natin ang mga buwis na iyan?” (Where will government get funds to pay its arrears to you if we remove these taxes) Adevoso asked the audience.

He said, besides veterans pension, other social services are funded from the collections from VAT and E-VAT, insinuating that its lifting as various sectors clamor is impractical.

Adevoso added he is apprehensive the country’s lawmakers might not be able to see fund sources for the veterans’ monetary claims.

Ano pa kaya ang pagkukunan ng gobyerno ng pondo kundi sa mga buwis?” (Where else will government get funds but from taxes) he said. He warned that a reduction in taxes would affect the veterans’ benefits.

In her State of the Nation Address, Pres. Gloria Macapagal-Arroyo admitted VAT kept her administration responding to the needs of the poor. “Magiging kawawa ang mahihirap kapag inalis natin ang VAT (The poor will be miserable if we removed VAT) she said.

Earlier Pagkakaisa ng mga Samahan ng mga Tsuper at operators nationwide (Piston) of the transport sector was clamoring for the removal of VAT from petroleum products to ease the spiraling rise in the prices of crude oil, gasoline and liquefied petroleum gas (LPG), which rose by about 20 times since January this year.

Other groups such as the urban poor and student groups Organisayon dagiti Nakurapay nga Umili ti Syudad (ORNUS) and Anakbayan, also raised the scrapping of the VAT on all consumer items because they said it raises the prices of many food items. # Lyn V. Ramo(NorthernDispatch)

Panlilinlang ni GMA sa datos ng VAT sa Sona, nabunyag

August 10, 2008

Mary Rose Retrita

MAPANLINLANG ang datos hinggil sa VAT (Value-Added Tax) na binanggit ni Pangulong Arroyo sa kanyang Sona (State Of the Nation Address), ayon kay Bayan Muna Rep. Teodoro Casiño.

Sa Sona noong Hulyo 28, sinabi ni Arroyo na mayayamang pamilyang Pilipino ang kalakhan ng binubuwisan ng VAT.

Pero ibinunyag ng mga opisyal ng DOF (Department of Finance) sa pagdinig ng House Ways and Means Committee, na ang mga pamilyang tinutukoy ni Arroyo sa kanyang Sona ay yaong mga kumikita ng P80,000 pataas kada taon, o P6,666 lamang kada buwan.

Gayunpaman, nilinaw ng DOF na hindi sa kanila nanggaling ang mga datos na ginamit ng Pangulo sa kanyang talumpati.

Gamit ang mga datos na nagmula sa Land Transportation Office, inihayag ni Casiño na sa katunayan, ang mga kotse at SUV na pagmamay-ari ng pamilyang mayayaman ay 16% lamang ng kabuuang bilang ng mga sasakyan.

Umano’y mas kakaunti ang binabayaran ng mga ito na VAT sa langis kumpara sa mahihirap na pamilya na gumagamit ng mga motorsiklo at traysikel (47.9%), mga pampublikong sasakyan (29%), mga trak (5.1%), at mga bus (0.5%).

Ipinahayag pa ng mga opisyal ng Meralco na ang mayayamang pamilya na kumokonsumo ng 1000KwH kada buwan ay 1% lamang ng mga kabuuang kumokonsumo ng kuryente.

Binubuo naman ng mas malaking bilang ng mga mamamayan ang kumokonsumo ng mas mababa dito (98.9%).

Kaya iginiit ni Casiño ang kagyat na pagtanggal sa VAT na umano’y ikinadurusa ng mayorya o ng mahihirap na Pilipino.(PinoyWeekly)

1 M pirma para sa dagdag-na-sahod, pagtanggal sa VAT, inilunsad ng Kristiyanong kabataan

August 10, 2008

Rodalyn Capilo

NANGANGALAP ng isang milyong pirma ng pagsuporta sa P125-dagdag-sahod at pagbasura sa VAT (Value-Added Tax) ang SCMP (Student Christian Movement of the Philippines), organisayon ng progresibong Kristiyanong kabataan.

“Magsisilbing pantulak ito sa pambansang kampanya laban sa kahirapan at krisis sa lipunan,” ayon kay Biyaya Quizon, tagapangulo ng SCMP.

Nagtayo ang SCMP ng desk sa harap ng simbahan ng Quiapo sa Maynila, upang hikayatin ang mga estudyante, mga palasimba, manggagawa, mga nagtitinda at mga dumadaan upang lumagda sa manifesto.

“Ngayon higit kailanman, kinakailangan ang dagdag-sahod. Ipinahahayag namin ang aming matinding pagkadismaya sa pahayag ng Malakanyang na hindi na mapapahintulutan ang panibagong pagtataas ng suweldo ngayong taon, habang ang mga mamamayan ay naghihirap araw-araw dahil sa tumitinding krisis,” dagdag pa ni Quizon.

Ayon pa kay Quizon, ipapadala sa Kamara at Senado ang mga pirma upang mapresyur ito na isulong ang panukalang batas sa P125 dagdag-sahod at pagbasura sa batas sa VAT.

Kinumpirma ng SCMP na humihingi sila ng tulong sa sa CBCP (Catholic Bishop Conference of the Philippines) sa pangangalap ng pirma sa mga parokya nito. Hiniling kamakailan ng CBCP sa gobyerno ang pagrepaso sa VAT.

Samantala, hinihikayat ng National Executive Committee ng Katipunan ng Kristiyanong Kabataan sa Pilipinas ang mga miyembro ng simbahang nagpoprotesta na sumuporta sa signature campaign sa pamamagitan ng paglagda sa manifesto na ipadadala sa lahat ng simbahan sa bansa.(PinoyWeekly)

From VAT, VAW to VFA: GWP Takes on Women’s Struggles

August 5, 2008

As Congress opens, the only women’s party-list group in the House of Representatives continues to uphold women’s rights and welfare through legislation.  The Gabriela Women’s Party (GWP) shares with Bulatlat its priority bills and resolutions, which include scrapping the Value-Added Tax and the Visiting Forces Agreement, tackling human trafficking, working for maternity leave extension, legislating against violence against women, and for divorce.

BY RONALYN V. OLEA
Bulatlat
Volume VIII, Number 26, August 3-9, 2008

The Gabriela Women’s Party (GWP) is the only women party-list in the House of Representatives. Founded on October 28, 2000, the GWP aims to advance women’s interests by legislating bills, sponsoring resolutions and by voicing out women’s views on significant national issues.

Its two representatives, Liza Maza and Luzviminda Ilagan, were leaders of the progressive women’s group GABRIELA before they were elected as GWP nominees.

Economic issues

In an interview, Cristina Palabay, GWP secretary general, said that the GWP, along with other progressive party list groups, will push for the repeal of the value-added tax (VAT) on oil and other basic commodities.

As early as January this year, GWP has filed a bill for the repeal of the reformed value-added tax (R-VAT). She said that the GWP representatives will demand for a hearing by either the Committee on Ways and Means or the Committee on Revision of Laws.

The GWP will also actively support the Genuine Agrarian Reform Bill and the bill for the legislated P125 across the board wage increase. Both bills were sponsored by the late Anakpawis Representative Crispin Beltran. Palabay said, “Being the most burdened in times of economic crisis, women are primary stakeholders in these issues.”

Migrants

As women comprise 70 percent of overseas Filipino workers (OFWs), the GWP takes on the issues of migrants.

A resolution was filed to conduct an investigation on the excessive collection of fees from OFWs by the Philippine Overseas Employment Agency (POEA), the Department of Foreign Affairs (DFA) and the Overseas Workers Welfare Assistance (OWWA).

According to Migrante International, OFWs are paying an average of  P15,400.00 each ($348 at an exchange rate of $1=PhP44.23)  in government fees, including $25 mandatory OWWA membership fee, $100 POEA processing fee, PhP 924 (more than $22)  for Medicare, PhP 650 ($14.69) for passport and other charges including mandatory training and assessment even for domestic workers.

Human trafficking continues to be a major concern for the GWP. Maza is the main author of the Anti-Human Trafficking Act of 2003.

The GWP’s House Resolution 649 calls on the Committees on Women, Foreign Affairs and Overseas Filipinos to look into allegations of trafficking using consular privileges.

Palabay cited the cases of Filipino domestic workers Marichu Baonan and Arlene Gado, who were both employed by diplomats.

On June 24, Baoanan filed charges of trafficking, forced labor, peonage and racketeering against former Philippine ambassador to the United Nations Lauro Baja Jr.

Gado arrived in the US in 2005 after signing a contract in the Philippines to work for Anthony Mandap, then vice consul in the Consulate General of the Philippines in San Francisco. She was, however, transferred to the household of Angelita Reyes, Mandap’s mother-in-law where she served as the Reyes’ domestic helper and caretaker for two years, getting a meager $250 to $325 a month for her services. In May 2007, Gado was rescued by New Jersey labor officials from the Reyes’ household, while Reyes was investigated and subsequently charged with involuntary servitude. Reyes pleaded guilty to charges of third degree criminal restraint and was ordered by the courts to pay $78,000 in back wages to Gado.

Palabay said that the point of inquiry would be to investigate how government officials use their positions and privileges to “legally” traffic women.

Another house resolution filed by Masa, HR 643, aims to investigate the incidents of trafficking of women from Central Luzon to Sandakan, Malaysia.

At least 200 women went to Malaysia via the Diosdado Macapagal Airport in Clark. These women were allegedly taken to brothels and prostitution dens.

Palabay said that the GWP will also file a resolution to inquire on the government’s plan for undocumented migrant workers who are targets for deportation in Malaysia and European Union countries.

She said that while government officials say that they will ensure an orderly deportation and the protection of the migrants’ human rights, the experiences of deportees in Sabah prove otherwise.

Palabay said, “Many Filipinos in Sabah are languishing in jail. May nanganak pang babae sa kulungan.” (A woman delivered her baby inside the detention cell.)

The group would also want to investigate the alleged criminal neglect of government officials. The resolution is pending at the Committee on Overseas Filipino Workers.

Labor

Women comprise 50 percent of the labor force in the Philippines. Besides the bill on the proposed wage hike, the GWP also filed House Bill 3973 seeking to extend the maternity leave for women workers.

Women workers are given 60 days or eight weeks for maternity leave. The bill intends to increase it to 120 days or 16 weeks to allow mothers to breastfeed for at least the first four months after delivery.

The Philippines ranks lowest in South East Asia, along with Malaysia in providing for maternity protection as indicated by the length of period of maternity leave benefits granted to women workers.

Vietnam                   4 to 6 months or 120 to 180 days
Thailand                   90 days
Cambodia                 90 days
Indonesia                 3 months or 90 days
Laos                        90 days
Myanmar                  12 weeks or 84 days
Singapore                 12 weeks or 84 days
Philippines                 60 days
Malaysia                   60 days

The GWP also filed a resolution to conduct an investigation on the alleged labor rights violations by Korean firm K&Y Apparel.

Women workers complained that the company violated the minimum wage law, implemented unfair labor practices and denied the workers’ right to organize.

The GWP also filed House Bill 4734 or the Public School Teachers’ Additional Compensation Act. Eighty percent of the public school teachers are women.

The bill aims to increase the salary of public school teachers by P9,000 ($203). According to the Alliance of Concerned Teachers (ACT), the present entry level salary of public school teachers is only PhP10,933 ($247). This accounts for only 56 percent of the family living wage of PhP 882 ($20) per day or PhP 19,404 ($438) per month as determined by the National Wages and Productivity Commission (NCPW).

Pinoy-style divorce

Addressing the issue of violence against women, the GWP will file a “Pinoy-style divorce bill.”

Palabay explained, “It’s different from the known kind of divorce, the no faults-divorce where you can just divorce each other without any reason, just because you want to…[the bill has provisions to] establish, review bases for divorce, it accommodates irreconcilable differences.”

Palabay said that legal separation and annulment are too costly for women. “You need to spend a minimum of P200,000 ($4,521) to avail of those remedies. You also have to wait for three to five years.”

Palabay said that existing laws on nullification and legal separation do not give immediate and long-term relief for women in violent and abusive marriages. She said that the divorce bill will not seek to repeal the laws on legal separation and annulment but will only give women another option.

She said that the Philippines and Malta are the only countries without a law on divorce.

Palabay further said, “By having annulment as recourse for women in violent marriages, the Church recognizes that some marriages do not work. The divorce bill is not anti-family because it aims to strengthen quality marriages and relationships. How can you prolong the agony of spouses, especially women, in violent, abusive relationships? That would be detrimental to women and their children.”

The 2003 report of the Philippine National Police shows that wife-battering accounted for 53.6 percent of the total 8,011 cases of violence against women. About three out of 10 perpetrators were husbands of the victims. Husbands accounted for 28 per cent of the crimes of violence against women.

Palabay said that divorce will be more easily facilitated and hopefully less expensive. She said there will be no need to hire psychologists, as required in most cases of legal separation and annulment.

Increasing women’s participation

The GWP also filed a bill seeking to increase women’s participation in various levels of politics and governance by as much as 50 percent.

Palabay said, “This hopes to empower women and to provide venues for the full exercise of women’s rights to participate and include the women’s agenda in politics and governance.”

Foreign troops, sovereignty

On the issue of national sovereignty, the party list group filed separate bills for the termination of the Visiting Forces Agreement and of the Philippine-Australia Status of Forces Agreement (SOFA).

Other resolutions sought to investigate abuses by American troops in Panamao, Sulu.

Palabay said that in spite of a resolution calling for support for Hazel, a Filipina allegedly raped by an American soldier in Okinawa, Japan, Congress has yet to take concrete action. The resolution was unanimously adopted in March.

In a separate interview, Maza said that she will take up Hazel’s case anew and look into several angles of the case, including the U.S. government’s trampling upon the sovereignty of states. Bulatlat

65% of NCR Residents Doubt VAT Earnings Go to Social Services

August 5, 2008

Majority of Metro Manila residents believe that revenues from VAT do not go to social services.

BY IBON FOUNDATION
Posted by Bulatlat
Volume VIII, Number 26, August 3-9, 2008

While Mrs. Gloria Macapagal-Arroyo stood firm in her State of the Nation Address against abolishing the value-added tax (VAT) because it will sacrifice funds for social programs, majority of Metro Manila residents believe that revenues from VAT do not go to social services.

According to the special survey conducted by IBON Foundation, 65 percent of National Capital Region (NCR) residents do not believe that the revenues from VAT are being spent for social services and other needs of people. Meanwhile, 27 percent said they believe the revenues are going to social services while 7.8 percent said they do not know.

Various people’s groups and lawmakers, including the Catholic Bishops’ Conference of the Philippines (CBCP), have been demanding for the removal of the regressive VAT.

Below is the tabulation of results of people’s perception on the value-added tax and social services.

Do you believe that VAT revenues are going to social services spending and other needs of the people?

Yes

102

27.49

No

240

64.69

Don’t Know

29

7.82

Total

371

100.00

Posted by Bulatlat

Poor Pays 90% of VAT on Power, Oil – Expert

August 5, 2008

Using government data, Ramon Ramirez, electrical engineer and spokesperson of People Opposed to Warrantless Electricity Rates, revealed that the poor pays for 90 percent of the VAT on oil and power.

BY RONALYN V. OLEA
Bulatlat
Volume VIII, Number 26, August 3-9, 2008

The poor and the middle class who probably expected that some measure of relief would be announced by Mrs. Gloria Macapagal-Arroyo during her State of the Nation Address (SONA) last July 28 may have been disappointed. A substantial portion of President Arroyo’s SONA was devoted to defending the administration’s insistence in retaining the value-added tax (VAT) on oil and power.

Arroyo said, “Kapag ibinasura ang VAT sa langis at kuryente, ang mas makikinabang ay ang mga may kaya na kumukonsumo ng 84 porsyento ng langis at 90 porsyento ng kuryente habang mas masasaktan ang mahihirap na mawawalan ng P80 billion para sa mga programang pinopondohan ngayon ng VAT. Take away VAT and we strip our people of the means to ride out the world food and energy crisis.” (If the VAT on oil and power is scrapped, the well-to-do who consume 84 percent of oil and 90 percent of power will benefit while the poor who stand to lose P80 billion [$1,808,931,599 at an exchange rate of $1=P44.225] for programs funded by VAT will suffer.)

However, government data belie her claim that the rich pay 84 to 90 percent of the VAT.

Power

Electrical engineer Ramon Ramirez, spokesperson of People Opposed to Warrantless Electricity Rates (Power) and convenor of Agham (Science and Technology for the People) said, “It is not the well-to-do but the majority of the people, which includes the poor, who pay 90 percent of the VAT on power, directly and indirectly.”

Data from the Department of Energy (link – http://www.doe.gov.ph/EP/Powerstat.htm ) show that in 2007, electricity sales by sectors were as follows:

pie graph

Ramirez said that while the industrial and commercial sectors consumed 62.4 percent of the electricity, the companies promptly passed on the VAT on power to the buyers of their products and services — the consumers, which include the poor and the vast majority of the people.
He maintained, “Thus, the consumers themselves, not the owners of the companies, ultimately paid the VAT on power.”

Ramirez said that the 3.4 percent consumed by street lighting, public buildings and the like and the VAT paid for them came from the people’s taxes. “Therefore, the VAT on the total of the three items, 66 percent, was paid indirectly by the people, not the rich,” he said.

Analyzing the data from Meralco’s latest breakdown of residential consumers, Ramirez said that the well-to-do who are presumably consuming more than 500 kilowatt-hour per month consumed only 28 percent of the total power delivered to homes, or 28 percent of the 34.11 percent in residential sales. This amounts to a mere 9.55 percent of the total power consumed.

Ramirez said that this means that relative to the nationwide power consumption in the DOE data, only about 10 percent of the VAT on power were paid for by the well-to-do and the rich.

Oil

Based on various government data, millions of poor people who directly consume petroleum products pay millions of VAT daily.

Daily, hundreds of thousands of jeepney drivers pay P67.95 million ($1,536,527 at an exchange rate of $1=P44.225) in VAT and tricycle drivers, P14.12 million ($319,292), for the fuel they consume. Thousands of fishermen using motorized bancas pay a total of P8.85 million ($200,113) in VAT per fishing trip.

More than nine million kerosene users pay P218.32 million ($4,936,673) for VAT per month. Kerosene is used primarily by the poor for cooking and lighting.

Estimated VAT Paid Daily/Monthly by Consumers of Petroleum Products

Ave. cost

Jan-July 2008

VAT

No. of direct consumers

Average

consumption

Total VAT Paid

Daily/Monthly

Diesel – P44.23/liter

P5.31

426, 572 jeepney drivers

30 liters/day

P67, 952, 920

Gas – P50.55/liter

P6.07

581,578 tricycle drivers

4 liters/day

P14, 120, 714

P6.07

177,000 fishermen with bancas

7.5 L /fishing trip

P8,057, 925

11-kg cylinder LPG – P587.57

P70.51

8.6 million households

1 tank/month

P606, 386,000

Kerosene –

P46.15/liter *

P5.53

9.4 million

households

4.2 L/month

P218, 324,400.00

* As of May 2008 only

Source of basic data: Oil Price Watch Department of Energy <http://www.doe.gov.ph/OPM/Oilmonitor.htm > , Land Transportation Office 2007 report, National Statistics Office 2004 Household Energy Consumption Survey, Piston, Pamalakaya

Based on the above data covering the period January to July 2008, the poor directly paid around P20.55 billion ($464,669,304) in VAT.

Estimated VAT Paid Directly by Poor Consumers, January to July 2008

Estimated Total VAT Paid

Jeepney drivers

P14,270,113,116

Tricycle drivers

P 2,965,349,906

Fishermen

P1,692,164,250

Kerosene users

P 1,528,270,800

TOTAL

P20,555,898,122

Added to this, taxpayers, including minimum wage earners, also pay for the oil consumption of government offices and government-owned and-controlled corporations (GOCCs).

Data from the Commission on Audit’s (COA) 2006 Annual Financial Report of the National Government show that the government spent P2.82 billion ($63,764,838) for gasoline, oil and other lubricants expenses.

The COA report shows that the top spenders of gasoline, oil and lubricants were the Department of National Defense and the Department of Interior and Local Government with P83 million ($3,670,675,000) and P63 million ($2,786,175,000), respectively.

The average retail price of gasoline then was P39.41 ($0.89) per liter and diesel, P34.46 ($0.779) per liter. Assuming that the consumption is constant, the 28 percent increase in the prices of petroleum products from 2006 to 2008 would mean that the government would spend P3.61 billion ($81,628,038) for the same items this year. From this amount, the 12 percent VAT shouldered by the taxpayers would be P379 million ($8,569,813).

Based on the Projected Oil Demand by Sector taken from the Philippine Energy Plan of 2006, below is the projected oil consumption in 2007:

A.1.2a Projected Oil Demand By Sector.xls


barrels in millions

Percentage

Power Generation

12.389

10.7

Residential

11.292

9.7

Transport

66.487

57.2

Industrial

17.212

14.8

Commercial

5.986

5.2

Agriculture

2.861

2.5

Total

116.227

100.0

Based on the above data, Ramirez noted that excluding the transport sector, the public pays 42.8 percent of the VAT on oil. He explained that the VAT on power generation is passed on to consumers as part of the generation charge. Ramirez said that factory owners and businessmen who comprise the industrial and commercial sectors also pass on the VAT to consumers. Oil consumption by residential and agriculture sectors is also paid for by the public.

Considering that the rich pays for only 10 percent of the total consumption of electricity, it may be concluded that they would shoulder only 10 percent of the oil consumption for power generation and of residences. And while the rich shares in paying for the oil consumption of industrial and commercial establishments as consumers, it is highly improbable that they, who constitute only around 5 to 10 percent of the population, would consume 84 percent of the products of commercial establishments even as they corner 35.9 percent of the total income.

Ramirez said, “This data alone already refutes Arroyo’s claim of 84 percent share by the rich.”

The breakdown of the projected oil consumption of the transport sector, which constitutes 57.2 percent of the total is as follows:

Cars

751,092

13.6%

Utility vehicles (UV)

1,602,619

29.0%

Sports utility vehicles (SUV)

192,991

3.5%

Truck

281,261

5.1%

Buses

30,159

0.5%

Motorcycles and tricycles (MC/TC)

2,647,574

47.9%

Trailer

24,356

0.4%

TOTAL:

5,530,052

100%

Source: Land Transportation Office (LTO) statistics

Ramirez said that of the above, the VAT on oil used by trucks, buses, trailers, tricycles is eventually and indirectly paid for by the public, since these are passed on to them as matter of business operating practice.

In 2001, the LTO statistics show that the government owns 4,089 cars and 1,255 sports utility vehicles (SUVs). This means that private car owners comprise less than 16 percent of the transport sector.

Thus, the estimated share of the rich in the VAT on oil is only 9.15 percent. In other words, 90.85 percent of the public directly and indirectly pays for the VAT on oil.

Shortchanged

In a separate statement, the Bagong Alyansang Makabayan (Bayan or New Patriotic Alliance) revealed that the national government may have collected as much as P1.8 billion ($40,700,966) in VAT from Meralco’s lifeline customers alone. The amount, according to Bayan, is P1 billion pesos ($22,611,644) more than the actual subsidy given.

Lifeline users are those consuming 100 kilowatt hour or less per month. The government gave a one-time P500 ($11.30) power subsidy for lifeline customers last month. For 1.7 million Meralco lifeline customers, the government spent P852 million ($19,265,121) for the one-time subsidies, Bayan said.

In her SONA, however, Arroyo said her government allocated P2 billion ($45,223,289) as power subsidy for four million poor Filipinos.

Bayan estimated that for 32 months, 50kWh-consumers paid a total of P470 ($10.627) each in VAT; 70kWh paid a total of P970 ($21.93); and those who consume 100kWh paid a total of P1,830 ($41.379) each in VAT.

Ramirez said, “Only a fraction of the collected VAT is doled out to the poor as subsidies under the signboard “Katas ng VAT para sa mahirap.” (VAT Revenues for the Poor)

In a statement, independent think tank IBON Foundation said that so far, only P9.3 billion ($210,288,298) or just half of the estimated P18.6 billion ($420,576,596) in windfall RVAT revenues is going to subsidies. This leaves another P9.3 billion ($210,288,298) unaccounted for inasmuch as another P2 billion ($45,289,223) in “subsidies” that had been hyped are merely loans that still have to be repaid.

It added that the administration’s “Katas ng VAT” is “a pretense to cover up how the largest part of reformed value-added tax (RVAT) revenues do not go to social programs but rather to paying off debt, militarism and political patronage to prop up Arroyo’s unprecedented unpopular rule.”

The independent think tank also criticized the Arroyo government for making it appear that the share going to social programs is larger than reality. IBON cited the Department of Finance report in 2006 stating that 30 percent or P23.5 billion ($531,373,657) of additional RVAT revenues went to social and infrastructure expenditures. However, the actual amount that went to social services was just P8.4 billion ($189,937,817) or only 11 percent of RVAT revenues.

IBON said further, “In contrast, the administration still insists, in the face of the people’s worsening problems, on allotting some 24 percent of the national budget to interest payments on debt.”

The government is paying P634 billion ($14,335,782,928) in total debt service in 2008 covering interest and principal payments.

Correct math

IBON said that the so-called pro-poor subsidies also do not have any lasting effect for the people who suffer record joblessness, rising prices and worsening poverty.

Ramirez asserted, “Correct math on hard data tells us that the people are better helped by removing the VAT on oil and power, and with the bonus that they have their dignity intact.” Bulatlat

Katas ng VAT for the poor: the data and the math

August 4, 2008

Katas ng VAT for the poor: the data and the math

“”It’s easy to understand why many would want to see taxes on oil and electricity removed. [But] if [the] VAT on oil and power is lifted, how do we replace about P80 billion in revenues, mostly used for the poor?

“Won’t scrapping the VAT on energy benefit mainly the well-to-do, who consume 84 percent of oil and 90 percent of power, while depriving the poor of billions [of pesos] in programs now funded by VAT?”

—GMArroyo, Inquirer, July 18, 2008

Although not new, still It is a clever  idea: tax the rich and the well-to-do since they allegedly use most of the oil and power, and then use the billions  to subsidize the  poor. That is why Arroyo bandies it around as “Katas ng VAT para sa mahirap”.

What does the hard data from the Dept of Energy (DOE) tell us?. In 2007, electricity sales by sectors were as follows:

Industrial       – 34.41%
Commercial  – 28.02%
Others          – 3.42% (street lighting, public buildings and the like)
Residential   – 34.11%

The industrial and commercial sectors consumed 62.4% of the electricity. The companies promptly passed on the VAT on power to the buyers of their products and services  — the consumers, which include the poor and the vast majority of the people. Thus, the consumers themselves, not the owners of the companies, ultimately paid the VAT on power

The 3.4% consumed by street lighting, public buildings and the like and the VAT paid for them came from the people’s taxes. Therefore, the VAT on the total of the three items, 66%, were paid indirectly by the people, not the rich.

That leaves us the 34% residential consumption. What percentage of this was used by the well-to-do and the rich?

DOE has no breakdown of the residential customers but Meralco has. We can take Meralco’s latest data since it is indicative of the figure for the whole Philippines.

The well-to-do are presumably those consuming more than 500 kwh.  This group consumed 28% of the total power delivered to homes.  That means that relative to the nation-wide power consumption in the DOE data only about 10% of the VAT on power were paid for by the well-to-do and the rich, i.e., 0.28 x 34%.

We can now say that the vast majority of the people, which includes the poor, pay 90% of the VAT on power.  Only a fraction of the collected VAT is doled out to the poor as subsidies under the signboard “Katas ng VAT para sa mahirap”. Correct math on hard data tells us that the people are better helped by removing the VAT on power, and with the bonus that they have their dignity intact.

As for Arroyo’s claim that 84% of the VAT on oil is paid for by the well-to-do and the rich — I would leave that as a homework for Arroyo and her economic advisers. I could give them a tip though: check out how much of the oil is consumed by the commercial and industrial groups whose VAT on oil are passed on to consumers. Check out also the oil consumption by government.

Arroyo will deliver her SONA tomorrow. She still has time to go over her data if she intends to repeat her claim and justify the VAT on power and oil. Otherwise people will say that her claim does not reflect the reality of concrete. People call it as not being truthful, or lying, or pagsoSONAngaling.

— AGHAM/POWER Research

July 27, 2008

Saan mapupunta ang P45-Bilyon?

July 31, 2008

Ilang-Ilang D. Quijano


HINDI natutuwa silang sanay nang magsilbi sa mga maralita.

Nang pumutok ang krisis ng taggipit—ang pagsirit sa presyo ng bigas, langis, at kuryente—at simulan ng gobyernong Arroyo ang programang pamamahagi ng subsidyo para diumano’y maibsan ito, agad na kumasa ang mga kawani ng DSWD (Department of Social Welfare and Development).

“Halos 24 oras nagtatrabaho ang aming crisis intervention units,” ayon kay Manuel Baclagon, bise-presidente ng Social Welfare Employees Association of the Philippines.

Ayos lang naman sana sa kanila na pasanin ang pamamahala ng bagong mga programa ng Pangulo, gaya ng “Pantawid Kuryente: Katas ng VAT”—pamimigay ng P500 subsidyo sa mga kumokonsumo ng mababa sa 100 kilowatt hour ng kuryente—at “Ahon Pamilyang Pilipino”—pamimigay naman ng P300 hanggang P500 sa pamilyang mahihirap.

Alam nilang kaiba ang mga programa sa subsdiyo, na madaliang ikinasa, sa regular na mga programa ng DSWD na mas masinsin ang pagpaplano at implementasyon. Pero kinikilala nilang pansamantalang tulong din sa mahihirap ang mga ito.

Kaya naman laking gulat na lamang nila nang ianunsiyo ni Pangulong Arroyo kamakailan ang National Social Welfare Program o NSWP. Hindi ito pangungunahan ng hepe ng DSWD, kundi ng bagong talagang hepe ng SSS (Social Security System) na si Romulo Neri, dating direktor heneral ng Neda (National Development Authority) at testigo sa maanomalyang NBN-ZTE.

Bilyun-bilyong dole-out

Noong Hulyo 8, pinirmahan ni Arroyo ang Administrative Order No. 232. Pinag-iisa ng AO 232 ang mga programa sa social welfare ng DSWD, Department of Health, Government Service Insurance Sytem, at iba pang mga ahensiya ng gobyerno sa isang programa na umano’y direktang tutugon sa “masasamang epekto ng pandaigdigang kapaligiran[g] (pang-ekonomiya).”

Pangungunahan ang nasabing lupon (cluster) ng administrador ng SSS na binigyan din ng posisyon sa Gabinete.

Ayon sa DoF (Department of Finance), nagkakahalagang P45-Bilyon ang pinagsamang badyet para sa panlipunang kapakanan (social welfare) ng nasabing mga ahensiya.

Pero malamang na lolobo pa ang halagang ito. Ayon sa nakalap ng PINOY WEEKLY na inamyendahang AO 232, pinamagatang “Adoption of Social Protection Framework to Harmonize the Efforts Addressing the Impact of Adverse Global Environment on the Country” at pinirmahan noong Hulyo 16, isinama na rin sa lupon ang Dole (Department of Labor and Employment), Philippine Health Insurance Corporation, Department of Agriculture, Department of Agrarian Reform, at Housing and Urban Development Coordinating Council.

Ipatatawag din ang iba pang Government-Owned and Controlled Corporations at mga liga ng lokal na pamahalaan para “suportahan and epektibo at madulas na implementasyon” ng mga programa para sa proteksiyong panlipunan (social protection).

Pinalitan din ang pangalan ng programa—mula National Social Welfare Program, ginawa itong National Social Protection Program o NSPP. Ito umano ang bungkos ng “mas buo at dinamiko na mga programa at polisiyang dinisenyo para mapababa ang antas ng kahirapan at bulnerabilidad sa pamamagitan ng pagkakapantay-pantay at seguridad.”

Pero tila“dole-out” o simpleng pamimigay pa rin ng mga subsidyo ang magiging esensiya ng programa, anuman ang itawag dito.

Sinabi ni Cerge Remonde, hepe ng Presidential Management Staff, na magiging sentro ng State of the Nation Address ng Pangulo ang mga subsidyo ng gobyerno, na bahagi ng programang pamumunuan ni Neri.

Maaasahan ng publiko ang mas marami pang subsidyo, ayon din kay Lorelie Fajardo, deputy presidential spokesperson. Itutuloy umano ang programang Katas ng VAT Para sa Mahihirap o paglalaan para sa mga subsidyo ng bahagi ng kinokolekta ng gobyerno na 12% VAT (Value-Added Tax) sa mga produktong petrolyo.

Ngayong taon, P73-B ang inaasahan ng DoF na malilikom na VAT sa mga produktong petrolyo, na 22 beses nang nagtaas ng presyo simula Enero.

Pondo ng SSS, magagamit din?

Layon ng AO 232 na isentralisa ang mga programa sa subsidyo sa mahihirap at iba pang programang social welfare ng gobyernong Arroyo. Ipinagtataka lang ng marami, bakit ito pamumunuan ni Neri sa SSS?

Wala umanong kredibilidad si Neri dahil sa kanyang pananahimik sa partisipasyon ng Pangulo sa $329-Milyong proyektong NBN-ZTE. Hinala pa ng iba, gaya ni Senate Minority Leader Aquilino Pimentel Jr., may inaasahan sa kanya ang Pangulo, kapalit ng posisyon sa Gabinete.

Mabilis na tumugon ang Malakanyang: hindi gagamitin para sa mga programa ng Pangulo ang P248-B pondo ng 27 milyong miyembro ng SSS.

Pero ayon nga kay Sen. Mar Roxas, “Kung magkagipitan at inutusan siya (Neri) ng Palasyo na maglabas ng pera ng SSS para sa isang proyekto na hindi naman para sa SSS members, makakatanggi ba siya?”

Usap-usapang nagbitiw ang dating hepe ng SSS na si Corazon dela Paz dahil sa pamemresyur sa kanya ng Malakanyang na gamitin ang pondo ng ahensiya para sa mga programa ng Pangulo.

Hindi ito kinumpirma ni dela Paz. Pero nasabi niya kamakailan sa midya: “May limitasyon ang paggamit ng pondo. Hindi ito maaaring gamitin sa maka-mahihirap na proyekto ng gobyerno.”

Dagdag na antas ng burukrasya

Samantala, naniniwala si Baclagon na di kinakailangan ang lupon para sa NSPP. “Kung para sa koordinasyon, nariyan na ang iba’t ibang Inter-agency Committee gaya ng National Anti-Poverty Commission at Social Development Committee ng Neda,” aniya.

Inangkop lamang ng NSPP ang estratehiya para sa social protection na binalangkas ng Neda-SDC. May apat itong sangkap: (1) Labor Market Programs, (2) Social Insurance, (3) Social Welfare, at (4) Social Safety Nets. Pangungunahan ng Dole ang una; ng SSS ang ikalawa; at ng DSWD ang ikatlo at ika-apat.

Ang SSS ang mamumuno sa lahat nitong mga ahensiya—kahit na DSWD ang may pinakamalawak na mandatong hawak. DSWD ang pangunahing ahensiyang nangangalaga sa “pinakamahihirap sa mahihirap.”

“Kung tunay na nagmamalasakit si Arroyo sa mahihirap, bakit hindi pamunuan ng DSWD ang mga programa para sa kanila? O dagdagan na lamang ang pondo ng ahensiya? Kami naman ang may karanasan sa ganyan. Bakit kailangang magtayo ng isa pang antas sa burukrasya?” ani Baclagon.

Puna pa niya sa mga programa sa subsidyo ni Arroyo, hindi pinag-isipan at pansamantalang solusyon lamang: “Nakakapanghinayang na nasasayang ang mga rekurso ng gobyerno sa mga pamigay na para sa kakaunti lamang, at nagagamit pa sa pulitika.”

Umano’y marami pang mga proyektong mas pangmatagalan ang epekto dahil kinokonsidera ang iba’t ibang mga indikasyon ng pag-unlad, tulad ng imprastruktura, kalusugan, edukasyon, sitwasyong pangkomunidad, serbisyong pansuporta (support services) at pag-oorganisa.

Tutol ang maralita

Hindi magdudulot ang NSWP ng “pagkakapantay-pantay” at “seguridad”. Bagkus, palalalain ng programa ang kawalan nito, ayon naman sa grupong maralita na Kadamay (Kalipunan ng Damayang Mahihirap).

“Ito ay panloloko lang upang mapagtakpan ang kanyang (Arroyo) malalaking pananagutan sa aming mga maralita. Masahol pa, tiyak na magiging balon ito korupsiyon laluna’t papalapit na ang 2010 halalan,” sabi ni Carmen “Nanay Mameng” Deunida, pambansang tagapangulo ng Kadamay.

Ginagamit din umano ang programa na dahilan para patuloy na makapangolekta ng VAT sa kabila ng lumalakas na panawagan mula sa iba’t ibang sektor, kabilang ang Simbahan, na tanggalin ito.

Sa komputasyon ng Kontra-KulimVAT, alyansang nananawagan ng pagtanggal sa VAT, sa bawat P1 subsidyong ibinibigay ng gobyernong Arroyo, P9 na VAT ang kinokolekta nito. (Batay ito sa P8-B na nagastos umano ng gobyerno sa mga programa sa subsidyo.)

“Ipinapakita nito na napupunta sa Malakanyang ang Katas ng VAT, at hindi sa publiko,” ani Arnold Padilla, tagapagsalita ng Kontra-KulimVAT.

Kung gayon, walang dahilang matuwa sa mga programa sa subsidyo hindi lamang ang mga kawani ng DSWD na tila sinagasaan ang trabaho—kundi ang bawat maralitang nagigipit, binubuwisan, at maaaring niloloko.


Larawan mula sa PCPO (Presidential Close-in Photographers Office)

9 of 10 Metro Residents Want Oil VAT Scrapped

July 30, 2008

In spite of aggressive government efforts to justify the 12% value added tax (VAT) on oil, almost nine out of 10 Metro Manila residents still feel that the said tax must be scrapped.

In a metro-wide survey conducted by IBON Foundation on July 12-13, 87.33% of respondents agree with the proposals to scrap the VAT on petroleum products.

President Gloria Macapagal-Arroyo is expected to highlight the supposed benefits of the people from government’s growing collections from the VAT in her State of the Nation Address (SONA) on Monday.

Various groups have been calling for the cancellation of the VAT on oil in the face of escalating pump prices with several legislative proposals implementing the said measure currently pending in the House of Representatives and the Senate.

The Catholic Bishops Conference of the Philippines (CBCP) has also called for at least a review of the oil VAT. Estimates show that at current price levels, removing the controversial tax can reduce pump prices by more than P7 per liter.

IBON’s special survey was conducted across NCR and has a margin of error of plus of minus three percent.

Below is the tabulation of results of the respondents’ perception on the removal of the value-added tax on petroleum products.

Do you agree with the proposals to remove the VAT on petroleum products?
Yes 324 87.33
No 31 8.36
Don’t Know 16 4.31

371 100.00

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.(PinoyPress)

GMA dared to collect revenues from sources other than VAT

July 30, 2008

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

Editorial Cartoon: Vatman is GMA’s Hero

July 29, 2008

Who’s the villain?

Economics and Society: VAT and the folly of subsidies through VAT

July 26, 2008

By ARTURO BOQUIREN

Last week I pointed out that the two most important responsibilities of the Filipino in today’s century is to fight for the fatherland and mother earth. This is a continuing theme of this column whether or not the two responsibilities are stated explicitly or implicitly or whether or not the two major responsibilities are stated at all.

Defending mother earth from the annihilation of global warming is indeed an important task, a key task of every life on the planet. At the same time, working for a truly sovereign Philippines free from imperialist and semi-feudal exploitation also remains a fundamental task for every Filipino. Further, it is always important for the exploited to liberate themselves from exploitation as their most important contribution to global or international emancipation.

For now, we address the issues of value added tax (VAT). What can be a good position on the issue? What can be our tasks?

In the June 1 issue of the Nordis, I pointed out that VAT is never the fundamental solution the solution to our tax woes because our more basic fiscal problem is the leakage of government revenues through graft and corruption. The VAT’s principal agenda is not really raising revenues but the restructuring of tax collections. It is meant to restructure tax collections so these would be compatible with trade liberalization. This is because without VAT, there will always be a temptation to tax imports.

The real and more important aim of tax restructuring through VAT is really to make the country fully liberalize on the trade front. Removing taxes on imports (tariffs) would supposedly move society to a higher level of welfare. However, moving towards trade liberalization requires that we replace the revenue losses from tariffs with tax gains from VAT that serves as a disincentive at the same time to both local production and the consumption of local goods.

In short, we tax our locals so we can accommodate more imports. Another way of describing the situation is that we provided disincentives to local production through VAT so we could import more. Can we export more with VAT? Not really because VAT also makes local production more expensive. With VAT we also provided a disincentive to the consumption of local goods. So who fundamentally benefit? Not us, not Juan de la Cruz!

Government policy makers justify VAT by saying that any bonanza from the VAT from the oil price hike will be used to fund subsidy programs for the poor. This is another folly and we can take Judy Anne Santos’ yelo or ice analogy on the Meralco systems loss.

In defending Meralco’s systems losses, Judy Anne Santos described system loss as similar to buying ice from a store. You purchase a block of ice but as you carry the ice home, the ice melts and the ice you bring home is no longer worth the ice you have originally bought.

In the case of VAT, it is taken as taxes on the consumers but along the way, what goes back to the consumer is much less than what was taken as VAT. A part of the loss can be traced to graft and corruption. Even multilateral agencies such the World Bank agrees that about 20% of government revenues goes to graft and corruption. Other than the “systems losses” through graft and corruption, the more harmful effect is on domestic production. VAT provides disincentives to local production and even the consumption of local goods. This type of “system loss” can mean less employment opportunities and less income for the Filipino.

Our options on the VAT can range from calling for its entire removal which will not be likely victorious as compared to calling for its significant reduction of the Philippine. But whether we oppose VAT entirely or call for its reduction, this column believes that what is more important in the VAT issue is to expose it as an instrument to facilitate trade liberalization and perpetuate the nation’s semi-feudal status.

Calling for a significant reduction of the VAT can be a good tactical call as we expose the grand scheme of imperialism behind the promotion of VAT taxation scheme in Philippines. As mentioned by Economics and Society 101 in the 1 June 2008 issue of the Nordis, versus the Philippines’ VAT rate of 12%, a number of countries impose a VAT rate of only 5%. These countries include Taiwan, Singapore (5-7%), and Malaysia. Canada imposes a 7% VAT. Switzerland, 7.6%. The world’s powerful nation, the United States, is not even in the list of nations with a VAT system. Thus, there is prospect for a probable win in the fight to reduce the VAT as a tactical call.#

(The writer maintains a blog at http://www.geocities.com/arturoboquiren. Comments can be coursed through http://www.nordis.net, artboquiren2040@yahoo.com, and +63927-536-8431)(NorDis)

Editorial Cartoon: Recto’s Way to the Senate

July 25, 2008

Administration Senatoriable

Recto sa Neda, umani ng batikos

July 24, 2008

UMANI ng batikos mula sa mga kongresista at senador ng oposisyon ang pagtatalaga ni Pangulong Arroyo kay dating senador Ralph Recto bilang bagong direktor-heneral ng Neda (National Economic Development Authority).

“Hinahamon namin ang bagong hepe ng Neda na bawiin ang lahat ng di-makataong programang pang-ekonomiya ng administrasyong Arroyo, kabilang na ang VAT (Value-Added Tax),” ayon kay Anakpawis Rep. Rafael Mariano.

Isa si Recto sa mga nagtulak ng pagsasabatas ng VAT bilang dating tagapangulo ng Senate Committee on Ways and Means. Tumakbo siya sa ilalim ng administrasyon at natalong senador noong 2007.

Binalaan naman ni Sen. Jamby Madrigal si Recto na huwag magpagamit kay Arroyo, gaya ni Romulo Neri na pinalitan niya sa posisyon.

Tumestigo si Neri sa Senado hinggil sa maanomalyang proyektong NBN-ZTE pero tumangging magbigay ng detalye hinggil sa pagkakasangkot dito ng Pangulo.

Ayon pa kay Senate Minority Leader Aquilino Pimentel Jr., isang “mabuting tao” si Recto na hindi nababagay sa isang “masamang administrasyon.”

Samantala, hinamon din ni Mariano si Recto na repasuhin ang multi-milyong dolyar na mga kontrata na pinirmahan ni Arroyo kamakailan. Kabilang dito ang $500-Milyong supply contract sa Libby’s Fruits at $200-M kontrata sa Abundant Biofuels.

Saksi si Pangulo sa paglagda ng isang Memorandum of Agreement sa pagitan ng Pilipinas at Libby’s Fruits sa kanyang pagbisita sa US noong nakaraang buwan.

Mamumumuhunan naman ang Abundant Biofuels, isa ring kompanyang US, sa Hilagang Mindanaw.

Ayon kay Mariano, patitindihin ng nasabing mga kontrata ang kontrol ng US sa ekta-ektaryang mga lupain sa bansa.

Jean N. Campos/Rodalyn S.M. Capilo/Hazel O. Nufable/Mary Rose B. Retrita(PWeekly)

P8-B VAT subsidy a ‘grand deception’

July 24, 2008

By Katherine Adraneda
Thursday, July 24, 2008

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Kontra-KulimVAT, a nationwide campaign initiated by the Bagong Alyansang Makabayan (Bayan), said the administration’s Katas ng VAT Program is “a grand deception” because in reality, the subsidy scheme merely earmarks P8 billion, or a scant 11 percent of the total projected VAT on oil collection by the government, which was estimated to reach at least P74 billion by end of 2008.

“It’s like for every peso that the government gives back to the people (through subsidies), the government amasses P9 from the VAT on oil,” noted Renato Reyes Jr., secretary-general of Bayan.

“It’s like one for you and nine for me, which is really a grand deception. The Katas ng VAT Program to supposedly mitigate the impact on the poor of the raging oil price crisis is only a sheer gimmick by the Arroyo administration,” Reyes said.

According to Arnold Padilla, spokesperson for Kontra-KulimVAT, the imposition of VAT was not actually meant to raise money for social services but to generate revenues to assure the government’s foreign creditors.

Highlighting the P8-billion fund for programs on subsidies, as opposed to the more than P66-billion VAT on oil that the government stands to collect and retain in its coffers, Padilla stressed that the Katas ng VAT is truly intended to benefit the administration more than the public.

“Clearly, the VAT is not helping the people as claimed by (President) Arroyo. It is an unjustifiable burden being imposed by a callous regime,” Padilla said.

At this point, the militants insisted that canceling the VAT on oil remains the best option to ensure a more significant impact on the people.

Padilla said that if VAT on oil is removed, a family of a jeepney driver would have an estimated P212 increase in his daily income, as he would no longer pay for the VAT imposed on diesel.

He insisted that such benefit is direct and would be felt immediately as compared to the microfinance program that President Arroyo is pushing for the wives of jeepney drivers.(PStar)

Lift VAT To Moderate Price Hikes, Gov’t Urged

July 22, 2008

Lifting the reformed value-added tax (RVAT) on oil would deliver more direct and indirect benefits to millions of poor Filipinos through lower prices, according to independent think-tank IBON Foundation. IBON research head Sonny Africa said that removing the RVAT on oil products would result in lower prices that would immediately benefit nearly one million jeepney and tricycle drivers and their families, as well as almost nine million households using liquefied petroleum gas (LPG). Also gaining will be at least three to four million farmers and fishermen and their families paying for irrigation or fuel for fishing boats. He added that other sectors would also indirectly gain as the effect on inflation caused by skyrocketing oil prices would be moderated.

Africa pointed out that the government subsidies funded by VAT earnings do not reach this many people in as sustained a manner. Africa pointed out that VAT earnings are barely used to subsidize pro-poor projects as P6 for every P10 immediately go to servicing the burgeoning debt.

The bottom line is that the VAT, no matter how small the government says the burden is, is anti-poor and already unbearable, Africa said.

If government needs additional revenues, there are other sources that will not unduly burden the poor, Africa said.  These include a genuine and sustained crackdown on corruption which underpins some P140 billion in VAT and income tax evasion annually, reversal of trade liberalization resulting in foregone tariffs of some P100 billion every year, and higher taxes on corporate incomes and luxury goods.

The difficult economic times also underscore the urgency of cutting back on debt service and strengthen arguments for stopping automatic appropriations for debt payments. There could be around P130 billion in savings if even just 20% of total debt payments of P634 billion in 2008 are suspended, Africa said. (end)(Ibon)

Lift VAT to Moderate Price Hikes

July 21, 2008

Lifting the reformed value-added tax (RVAT) on oil would deliver more direct and indirect benefits to millions of poor Filipinos through lower prices.

BY IBON FOUNDATION
Posted by Bulatlat
Vol. VIII, No. 24, July 20-26, 2008

Lifting the reformed value-added tax (RVAT) on oil would deliver more direct and indirect benefits to millions of poor Filipinos through lower prices.

IBON research head Sonny Africa said that removing the RVAT on oil products would result in lower prices that would immediately benefit nearly one million jeepney and tricycle drivers and their families, as well as almost nine million households using liquefied petroleum gas (LPG). Also gaining will be at least three to four million farmers and fishermen and their families paying for irrigation or fuel for fishing boats.

He added that other sectors would also indirectly gain as the effect on inflation caused by skyrocketing oil prices would be moderated.

Africa pointed out that the government subsidies funded by VAT earnings do not reach this many people in as sustained a manner. Africa pointed out that VAT earnings are barely used to subsidize pro-poor projects as P6 ($0.13 at the July 18 exchange rate of $1:P44.46) for every P10 ($0.22) immediately go to servicing the burgeoning debt.

The bottom line is that the VAT, no matter how small the government says the burden is, is anti-poor and already unbearable, Africa said.

If government needs additional revenues, there are other sources that will not unduly burden the poor, Africa said. These include a genuine and sustained crackdown on corruption which underpins some P140 billion ($3.15 billion) in VAT and income tax evasion annually, reversal of trade liberalization resulting in foregone tariffs of some P100 billion ($2.25 billion) every year, and higher taxes on corporate incomes and luxury goods.

The difficult economic times also underscore the urgency of cutting back on debt service and strengthen arguments for stopping automatic appropriations for debt payments. There could be around P130 billion ($2.92 billion) in savings if even just 20 percent of total debt payments of P634 billion ($14.26 billion) in 2008 are suspended, Africa said. Posted by Bulatlat

VAT sa krudo, nasa P6.71 na kada litro; P88.62 sa LPG

July 17, 2008

Soliman A. Santos

Umaabot na sa P6.71 ang VAT (value added tax) sa krudo habang P88.62 sa bawat 11-kilogram na tangke ng LPG (liquefied petroleum gas) matapos ang 18 beses na pagtaas ng presyo ng langis ngayong taon, ayon sa Kontra-KulimVAT, isang grupong nananawagan sa pagtanggal ng VAT sa langis at kuryente.

Noong Enero, nasa P4.61 kada litro ang buwis sa langis habang P72.35 kada 11-kg tangke ng LPG. Nangangahulugan ito na sa loob lamang ng kulang na pitong buwan, P2.10 kada litro ng krudo at P16.27 kada tangke ng LPG ang nakolekta ng gobyerno sa mga nabanggit na produkto.

Idinagdag pa ng Kontra-KulimVAT na noong Enero, tinatayang P81.27 milyon araw-araw ang nakokolekta ng gobyerno sa VAT sa krudo at P18.62 kada araw sa LPG. Dahil sa mga pagtaas ng presyo, inaasahang makakakolekta ang gobyerno ng P118.29-M mula sa VAT sa krudo at P22.77-M  sa LPG.

“Gayunman, ang malaking pagtaas ng buwis ng gobyerno ay nangangahulugan ng mas malaking pahirap sa mga ordinaryong mga mamamayan,” ayon kay Arnold Padilla, tagapagsalita ng Kontra-KulimVAT.

Sinabi ni Padilla na noong Enero, gumagastos ng P138.80 sa arawang biyahe ang isang drayber ng dyip para sa VAT sa krudo. Sa ngayon, tinatayang P201.30, o dagdag na P63 ang kanilang kailangang gastusin. Tinatayang nasa 426,000 ang tsuper ng dyip sa buong bansa.

Samantala, halos 8.6 million kabahayan sa buong bansa naman ang gagastos ng P66.46 kada buwan para bayaran ang VAT sa LPG, kumpara sa P54.26 noong Enero.

“Hindi na mapapangatwiranan ng administrasyong Arroyo ang VAT sa langis dahil sa tuluy-tuloy na pagtaas ng presyo. Ang desperadong hakbang nito para kontrahin ang panawagang alisin ang buwis na ito sa pamamagitan ng rolbak ng presyo at mga subsidyo ay hindi magpapatahimik sa nahihirapang taumbayan,” sabi ni Padilla.(PinoyWeekly)

Para kontrahin ang VAT, boykot sa remitans pinanawagan ng migrante

July 17, 2008

Soliman A. Santos

MULING ipapanawagan ng Migrante-Middle East ang kampanyang “zero remmittance day” kung babalewalain ng administrasyong Arroyo ang panawagan ng taumbayan na alisin na ang VAT (value added tax) sa produktong petrolyo.

“Ang pinakaposibleng magagawa ng gobyernong Arroyo para kahit paano’y mapabuti ang kalagayan ng taumbayan ay tanggalin ang VAT sa langis, subalit kung hindi ito gagawin ng gobyerno, mananawagan kami ng “zero remmittance day”, ayon kay John Leonard Monterona, tagapag-ugnay ng Migrante-ME.

Sinabi ni Montenora na ang tuluy-tuloy na pagtaas ng presyo ng langis ay naagpapataas rin sa presyo ng mga batayang bilihin na nagpapahirap sa mga manggagawa, magsasaka at mga maralita.

Idinagdag ni Monterona na kahit ang mga overseas Filipino worker ay hindi ligtas sa epekto ng lingguhang pagtaas ng presyo ng produktong petrolyo dahil humihingi ng dagdag na padala ang kanilang mga pamilya.

Lehitimo din lamang umano na hilingin nilang alisin ang mga kinakaltas sa kanilang remitans para makatikim sila ng kahit kaunting ginhawa.

Babantayan umano ng Migrante kung papakinggan ng gobyernong Arroyo ang panawagang tanggalin ang VAT sa langis, kung hindi, ipananawagan nila ang “zero remmittnace day” sa iba’t ibang panig ng mundo.(PinoyWeekly)

Inis sa buwis sa langis

July 17, 2008

Konteksto

Danilo Araña Arao

MAGSIMULA tayo sa isang paglilinaw: Ang pag-aalis ng 12 porsiyentong VAT (value-added tax) sa mga produktong petrolyo ay hindi nangangahulugan ng awtomatikong pagbaba sa presyo ng mga ito.

Dahil sa deregulasyon sa downstream oil industry, may kalayaan ang mga kompanya ng langis na magtakda ng anumang presyong nais nila.

Nakasaad man sa Republic Act No. 8479 (Downstream Oil Industry Deregulation Act of 1998) na ilegal ang predatory pricing (Sek. 11), ang esensiya ng probisyong ito ay protektahan ang mga kompanya ng langis sa gawain ng malalaking kakompetensiyang magbenta ng mga produktong petrolyo nang mas mababa pa sa average variable cost. Ibig sabihin, walang nagbabawal sa isang kompanya ng langis na taasan ang presyo ng mga produkto nito kumpara sa mga kakompetensiya.

Hindi ba’t sa simpleng pagbabasa pa lang ng Sek. 11 ng RA 8749 ay maiinis ka na? Kung isasakonteksto mo pa ito sa pagtatanggal ng buffer fund at iba pang mekanismo para magbigay ng subsidyo (kahit na lang sa tinatawag na socially sensitive products tulad ng diesel, kerosene at LPG), lumalabas na walang pakialam ang gobyerno kung itaas man nang sobra-sobra ang mga produktong petrolyo.

Pero sa totoo lang, may pakialam ang gobyerno sa usapin ng kita: Nasa bentahe kasi ng gobyerno ang patuloy na pagtaas ng presyo ng mga produktong petrolyo dahil sa mas mataas ang buwis na makokolekta mula sa mga ito.

Isipin mo na lang. Ipinatupad ang Republic Act No. 9337 (Reformed VAT Law) na sumaklaw sa mga produktong petrolyo at nagtaas sa VAT rate mula 10 papuntang 12 porsiyento noong Nobyembre 1, 2005. Noong panahong iyon, ang presyo ng gasolina ay P36.05 at ang diesel ay P32.95.

Sa ngayon, ang presyo ng gasolina at diesel ay mahigit nang P60 at P50. Sa kabila ng pisong rollback ngayong linggo, inaasahan pa rin ang tuluy-tuloy na pagtaas sa presyo ng mga produktong petrolyo sa mga susunod na buwan. Sa aking opinyon, ang ginawang rollback ay para lang mapawi, kahit pansamantala, ang galit ng mamamayan. Pansinin ding ang desisyon ng mga kompanya ng langis hinggil sa rollback ay nangyari isang araw bago ang pambansang walkout ng kabataan na kung saan isa sa mga isyu ay ang krisis sa langis.

Sa usapin ng VAT, hindi mo na kailangang maging eksperto sa matematika para malamang malaki ang kaibahan sa 12 porsiyentong VAT na kinokolekta noon at ngayon.

Mula Enero hanggang Setyembre 2006, makikita sa datos ng DOF (Department of Finance) na nakakolekta ang pamahalaan ng P15.1 bilyon mula sa VAT sa mga produktong petrolyo. Para sa buong taon ng 2007, ang aktuwal na nakolektang VAT mula sa mga produktong petrolyo ay P45.6 bilyon.

Sa konteksto ng nagtaasang presyo ng mga produktong petrolyo, hindi na nakakagulat na ang inaasahang makolektang VAT sa taong ito ay P73.4 bilyon na nangangahulugan ng 61 porsiyentong pagtaas kumpara sa nakaraang taon. At kung gusto mong ikumpara ito sa nakolekta noong unang siyam na buwan ng 2006, ang pagtaas ay umaabot sa 386 porsiyento.

Ang panawagan para tanggalin ang VAT sa mga produktong petrolyo ay may layuning tanggalin ang pagsasamantala ng pamahalaan sa paghihirap ng mamamayan. Ang anumang rollback na magreresulta mula sa pagtatanggal ng VAT (kung mayroon man) ay nasa desisyon pa rin ng mga kompanya ng langis. Ang pagkokontrol sa presyo ng mga produktong petrolyo ay susi sa pagkakaroon ng makatarungang pagtatakda ng presyo lalo na sa diesel, kerosene at LPG na binibili ng mahihirap.

Pero imposible ang pagkokontrol sa presyo ng mga produktong petrolyo sa ilalim ng deregulasyon. Kaya huwag kang magulat kung may dalawang susing panawagan sa panahong ito – ang pagbabasura sa RA 8479 at ang pagtatanggal ng VAT sa mga produktong petrolyo.

Paano nga naman magiging makabuluhan ang pagbabago kung pababayaan natin ang isang mapanupil na rehimen, sa industriya man ng langis o sa buong lipunan?

Para makipag-ugnayan sa awtor, pumunta sa http://www.dannyarao.com.

Editorial Cartoon: The Fund

July 16, 2008

Its election time!

‘Katas ng Saudi’ No More; OFW Earnings Go to VAT

July 12, 2008

With the rising cost of basic commodities coupled with the value-added tax (VAT), millions of overseas Filipino workers say goodbye to “Katas ng Saudi,” or big earnings from Saudi.

BY BULATLAT
MIGRANT WATCH
Vol. VIII, No. 22, JULY 6-12, 2008

“No more ‘Katas ng Saudi!’ OFWs are bleeding dry!”

This was the statement of the Middle East chapter of Migrante International amid the increasing prices of food and fuel that caused the country’s inflation rate to reach a 14-year high.

John Leonard Monterona, Migrante-Middle East regional coordinator, said, “With food inflation up to 17.4 percent and fuel inflation up to 22 percent as reported by the Bangko Sentral ng Pilipinas (bsp OR Central Bank of the Philippines), the ­so-called ‘Katas ng Saudi’ or OFW earnings becomes a myth and a wish of every OFWs.” He said that millions of ordinary OFWs are receiving only US$350 to US$500 a month.

Monterona cited the price of an 11 kg. liquefied petroleum gas (LPG) tank that increased by P76.94 to almost P600 from January to December 2007. “Now, how much is the cost of an 11 kg. LPG tank?” he asked.

He noted as well the Manila Water early this year has implemented a rate hike. Consumers who use 30 cubic meters per month pay an additional P60.

Monterona said, “Our dependents are asking us to send more…[we] tighten our belts and remit almost all of our income…” He said that most of them are looking for part-time jobs just to send more for their families back home.

Monterona said that the Arroyo government, if it has political will, could initiate “doable” economic policies that provide relief to consumers and the public in general.

He said that one of these is the removal of the Value Added Tax (VAT) on power and petroleum products. This, he said, will give consumers especially the poor, OFWs and their families’ immediate relief from rising prices greatly affecting every OFW households’ meager income.’

The OFW leader cited a study by the Bagong Alyansang Makabayan (Bayan or New Patriotic Alliance) which shows that scrapping the VAT on oil can immediately bring down pump prices of unleaded gasoline by P5.83 per liter; kerosene, P5.29; diesel, P4.98; and liquefied petroleum gas (LPG), P68.83 per 11-kilogram cylinder.
“The Arroyo administration must set aside its greed for the P54 billion annual revenues collected from VAT imposition on oil products,” Monterona added. He said that VAT assures foreign creditors of debt payments.

“We are calling all OFW-families, dependents and relatives to join scheduled mass actions aiming to put more pressure on the Arroyo regime to scrap the VAT on oil,” Monterona said. Bulatlat

Church officials prod gov’t to lift EVAT

June 10, 2008

MANILA, June 9, 2008—A ranking official of the Catholic bishops’ leadership appealed to the government to put more effort to grapple spiraling oil and electricity rates in the country.

CBCP-Public Affairs Committee head Bishop Deogracias Iñiguez said the Energy Regulatory Commission should take absolute action on the growing challenge to advance the common good.

“They (ERC) have to put more extra efforts to help the people against the high electricity rates,” he said.

Iñiguez said he is certain the authorities know very well the main key to lower power bills of consumers if only they have the will to do it.

Senator Joker Arroyo over the weekend likewise asked the ERC to take serious moves to lower down electricity rates without solely depending on altering the Electric and Power Industry Reform Act.

The prelate also urged the government to consider the public clamor of repealing the oil deregulation law to somehow mitigate the effects of escalating global fuel prices.

“The government should instead regulate oil prices because it’s getting higher causing the public to suffer,” Iñiguez said.

Last week, Consumer and Oil Watch chairman Raul Conception warned that the global oil prices are still set to jack up.

The Church-based group Solidarity Philippines also stressed the need to at least reduce the expanded value added tax (EVAT) on oil and the power sector.

Solidarity Philippines convener Fr. Joe Dizon said it was unjust for the government to rake in billions in EVAT collections at the expense of consumers.

“Life is very hard now. The government should be the first to sacrifice. And EVAT is big burden for the people,” Dizon said. (CBCPNews)

Economics and Society 101: A but for VAT

June 4, 2008

By ARTURO BOQUIREN

VAT or value-added taxation comes to the limelight because recently various sectors are suggesting that VAT on oil and power be removed. This writer had opposed the VAT system when it was first proposed several years ago on the ground that it was not (and never has been) the solution to the country’s tax woes. Further, this writer has continued to expose the VAT as anti-poor or regressive taxation. Regressive taxation takes place when the tax rate diminishes as one goes up in the income ladder.

On its own, VAT is essentially regressive because consumption as a percentage of income decreases as income increases (savings rate increase) and, therefore, the tax rate decreases as one goes up in the income ladder under the VAT. That the VAT taxation is regressive is affirmed by at least one study conducted by the Philippine Institute of Development Studies.

Further, contrary to government propaganda, value-added taxation is never a fundamental solution to Philippine tax and revenue woes. VAT was proclaimed during its advocacy years as the solution to our national tax mis-performance. It was consciously mis-presented by writers in the payroll of government and interest groups as the solution to our problems of underdevelopment and mis-development. The tax system would supposedly eliminate tax evaders, especially big tax evasion of the big ones. Our country’s experience, however, has shown the contrary: tax evasion, especially by the big ones, continued even with a VAT system.

Propaganda misrepresenting the VAT as a fundamental solution to our country’s underdevelopment is either lie or a naïve assessment of the root-causes of our underdevelopment. We have tax woes not because of our tax system but primarily because of our political economy: those who have the economic power holds political power and influence and the many are powerless because they are unorganized and unassertive in advancing their rights and interests. Various countries have performed better than the Philippines and have better tax collection rates and this is not because of VAT. The world’s most economically powerful nation, the United States, is not even in the list of nations with a VAT system although there is a document that place its VAT rate at 5%.

The Philippine VAT standard rate is 12%. In contrast, a number of progressive countries have a much lower VAT rate. The VAT rate is only five percent in Taiwan, Singapore, Japan and Malaysia. VAT is 5-7% in Canada, and 7.6% in Switzerland. Does a low VAT rate become an obstacle to their development? Of course, no. Does a low VAT rate present an obstacle to their tax collection system? Again, of course, no.

Really, a number of development and economic “experts” have been misleading our country. Actually, we can attribute much of our underdevelopment to these economic and development “experts”.

Actually, the ulterior motive for advocating VAT came from a desire to move from a “dependency” on taxation on imports or tariffs. Free-marketeers argue that this is necessary so we can benefit from trade liberalization. In short, we have actually strangulated our local manufacturers so we can benefit from trade liberalization!

With the VAT, we have even made the prices of imported goods lower and the prices of domestic goods higher. Double baloney!

While countries such as Japan, Taiwan, Malaysia, and the United States (through VER or “voluntary” export restraint which in practice is a coercion against exporters to “voluntarily” reduce their exports to the United States) practiced de facto restrictions on imports, trade liberalization was coerced upon us and to ensure that we implement trade liberalization, we were moved into the VAT system. We were asked or coerced to reduce or eliminate our tariffs on imports and move into the VAT system that raised taxes on domestic production. #

(The writer maintains a blog at http://www.geocities.com/arturoboquiren. Comments can be coursed through http://www.nordis.net, artboquiren2040@yahoo.com, and +63927-536-8431)

VAT One of the Culprits in Oil Price Increases

June 3, 2008

Citing data that the VAT on oil is one of the main culprits in the surge in oil prices,  consumer group Kontra-KulimVAT initiated a petition campaign for the scrapping of the value-added tax (VAT) on petroleum products as well as power rates.

BY RONALYN OLEA
Bulatlat
Vol. VIII, No. 17, June 1-7, 2008

With the weekly surge in oil prices, the latest of which is a P1.50 ($0.03) increase – the highest in recent months – Consumer group Kontra-KulimVAT (literally: against theft) initiated a petition campaign for the scrapping of the value-added tax (VAT) on petroleum products and power rates.

Kontra-KulimVAT was formed in 2005 at the height of the campaign against the imposition of VAT on goods and services. It has been revived recently amid the rising prices of oil, power and basic commodities.

Anti-VAT advocates initially gathered signatures from commuters of rail transits on May 23 and May 30. At the North EDSA station of the MRT, people from all walks of life signed the petition. In less than two hours, Kontra-KulimVAT said they get an average of 1,000 signatures from every station.

Urgent

In a statement, Arnold Padilla, spokesperson of Kontra-KulimVAT said, “If government truly intends to ease the people’s burden, one of the most urgent and doable policy reforms is the removal of VAT on oil and power.” Padilla said the petition drive aims to pressure legislators to rush the approval of bills removing the VAT on oil and power before Congress takes a break in mid-June.

The Bagong Alyansang Makabayan (Bayan) earlier revealed that the scrapping of VAT on petroleum products will bring down the prices and will benefit millions of households and drivers of public utility vehicles.

Estimated benefits of oil VAT cancellation based on 7 May 2008 prevailing prices in NCR

Sector

How much do they spend on oil?

How much will they save without the oil VAT?

How many will benefit? (nationwide)

With VAT

Without VAT

Jeepney drivers using 30 liters of diesel per daily trip

P1,246.20 per daily trip

P1,096.66 per daily trip

P149.54 per daily trip

426,572 jeepney drivers

Tricycle drivers using 4 liters of unleaded gasoline per daily trip

P194.24 per daily trip

P170.93 per daily trip

P23.21 per daily trip

581,578 tricycle drivers

Small fishers using motorized bancas with 10 liters of regular gasoline per fishing trip

P458.60 per fishing trip

P403.57 per fishing trip

P55.03 per fishing trip

708,000 small fishers

Households using 11-kg LPG tank

P573.61 per tank

P504.78 per tank

P68.63 per tank

8.6 million households

Households using 4.2 liters of kerosene per month for lighting & cooking

P185.30 per month

P163.07 per month

P22.24 per month

9.4 million households

Sources of basic data: DOE, LTO, IMF, NSO, Piston, Pamalakaya, interviews

VAT as the culprit

The VAT on petroleum products is the biggest chunk in the total VAT collections of the Arroyo government.

In an interview, Sonny Africa, research head of IBON Foundation, said that besides the oil deregulation law, the imposition of VAT is one of the main reasons for the increase in prices of petroleum products.

Based on data from the Department of Finance (DOF), P49.20 billion ($1,124,57,428 at an exchange rate of $1=P43.75) was collected from VAT on petroleum products in 2006. This accounts for 63.9 percent of the total VAT collections that year. From January to July 2007, of the P42.7 billion ($976 million) VAT collections, 43.5 percent or P18.6 billion ($425,142,857) was collected from VAT on petroleum products.

Kontra-KulimVAT, citing data from the DOF, noted the VAT increases in petroleum products. From P4.24 ($0.09) per liter in 2006, VAT on oil increased to P4.38 ($0.10) per liter in 2007. As of May 2008, the average VAT on oil is pegged at P5.06 ($0.115) per liter.

Padilla said that the Arroyo administration earns around P5.5 million ($125,714) daily for every P1 ($0.02) per liter increase in pump prices. “This explains why the Arroyo government does not want to scrap the VAT and control oil prices.”

In one of his last statements as press secretary, Secretary Ignacio Bunye said that removing the VAT on oil would result in more problems.  He said that removing the VAT on oil would affect the credit worthiness of the Arroyo government and would weaken the peso. He said that this would eventually increase the prices of petroleum products even more.

Africa said that removing the VAT on oil would result to a more positive rather than negative impact.

Meanwhile, based on May 2008 Meralco rates, Kontra-KulimVAT said that residential consumers will save an average of 72 centavos ($0.016) per kilowatt-hour if VAT is removed. Official data from the Department of Finance (DOF) show that in 2007, the Arroyo government collected P11.4 billion ($260,571,428) VAT on power.

Not for social services

The groups debunked the DOF’s claim that canceling the VAT on oil and power will “impair the delivery of services” by government.

Padilla pointed out, “When the DOF pushed for the imposition of the VAT on oil and power in 2005 due to pressure from the International Monetary Fund (IMF), social services were never in the equation. Their primary concern then, and now, was the country’s credit worthiness. They wanted to assure foreign creditors that government can pay its debts, not to raise more funds for public hospitals, housing or education.”

Independent think-tank IBON Foundation estimates that 87 percent of government revenues go to debt payments. It is equivalent to 11.8 percent of the country’s Gross Domestic Product (GDP) each year.

Padilla concluded, “We could not afford any further delay in the scrapping of the VAT on oil because prices continue to go up. Over the weekend, oil firms jacked up their pump prices and they will implement more increases in the coming weeks. We hope Congress appreciates the urgency of the problem.” Bulatlat

P2-B subsidy to pay for electricity bills

June 1, 2008

THE GOVERNMENT HAS SET ASIDE A P2-BILLION SUBSIDY as a way to help the poor pay their power bills.

Social Welfare Secretary Esperanza Cabral said Saturday she would present her proposed cash transfer program for small electricity users at the first meeting of the Presidential Task Force on Energy in Malacañang on Monday.

Cabral has been assigned by President Macapagal-Arroyo to draft a cash transfer program for small electricity users using P2 billion, which is part of the P4 billion earlier earmarked by Ms Arroyo for allocation to help people cope with soaring energy costs.

The P4 billion is the money so far collected by the government from the value-added tax (VAT) on electricity. Officials expect the amount to reach P18 billion this year.

“This [subsidy] is help for the poor because power costs have gone up,” Cabral said in a phone interview.

She said the “target” of the cash transfer was the 1.9 million small users of electricity, or those called lifeline users consuming less than 100 kilowatt hours a month in areas covered by Manila Electric Co. (Meralco).

These lifeline users are being served by Meralco in Metro Manila and the provinces of Cavite, Pampanga, Bulacan, Rizal and Quezon.

Cabral said that if she were to calculate the allocation of the P2-billion cash transfer, 1.9 million lifeline users would be entitled to P1,000 a year, or P100 a month.

The subsidy will help, for example, a user of 50 kWh of electricity a month whose bill is P212, she said.

Going by this estimate, Cabral said, the subsidy could be given to small electricity users for a period of from 10 months to one year.

“These are all tentative options that I will present to the task force,” she said.

Cabral said she had yet to decide whether this cash transfer program would cover lifeline users in Metro Manila only, or those in the entire Meralco franchise area (National Capital Region, Region 3 and Region 4A).

She said she also had yet to decide on the mode of the cash transfer — “whether this would be in one lump sum, or every quarter or every semester.”

She added that she was likewise still studying the requirements to be imposed on the beneficiaries of the cash transfer. One option is for small electricity users to present their last monthly bill to authorities she said.

Unlike the other cash transfer programs of the Department of Social Welfare and Development, this love cannot be a conditional one because of, among others things, the small amount involved, Cabral said.

“It’s really just a subsidy to help them get by,” she said.

Malacañang had earlier announced a government plan to use the VAT on oil for the people’s benefit.

Lawmakers are seeking the scrapping of the VAT on oil. But Palace officials have opposed this, saying at one point that it would be “a cure worse than the disease.”

After last week’s Cabinet meeting in La Union, Press Secretary Ignacio Bunye said Malacañang’s plan was “to give back to the people” the proceeds of the VAT on oil.

Bunye said that the Palace had earmarked P4 billion for the people — P2 billion to go to the conditional cash transfer program of the DSWD, P1 billion in assistance to the transport sector (particularly for the conversion of vehicles to gas-fueled vehicles), and another P1 billion for loans and assistance to schools.

During the meeting, Ms Arroyo ordered the reactivation of the Presidential Task Force on Energy and gave it two weeks to come up with a contingency plan on how the country could cope with the rising costs of power and oil.

Cabral’s report will apparently be part of the task force’s contingency plans.

(PDI)

===============

My Take: Pinabayaan ng gbyernng magkamal ng mlaki ang mga kompanya ng langis at kuryente.  at ngayon, ang pera natin ang ipambabayad pa nila?  Ganito na lang ba lagi? Legal na pagnanakaw sa kaban ng bayan?

Signature Drive Vs VAT on Oil, Power Resumes

May 31, 2008

Groups press Congress to rush bills removing VAT on oil and power

As another round of oil price hikes looms over the weekend, groups behind the Kontra-KulimVAT, a campaign to cancel the 12% value added tax (VAT) on electricity and petroleum products, resumed today their signature drive this time in various LRT stations.

The signature campaign, held simultaneously in LRT stations in Monumento, Blumentritt, Carriedo, Pedro Gil, and Baclaran, aims to pressure legislators to rush the approval of bills removing the VAT on oil and power before Congress takes a break in mid-June.

“We could not afford any further delay because prices continue to go up. Tonight or over the weekend, oil firms are expected to again jack up their pump prices and they will implement more increases in the coming weeks. We hope Congress appreciates the urgency of the problem,” said Arnold Padilla, Kontra-KulimVAT spokesperson.

Padilla said that while Malacañang opposes the bills, the people’s warm response to the signature drive that started last week shows that there is a strong public clamor for Congress to prioritize the removal of the VAT on oil and power.

Kontra-KulimVAT groups earlier disclosed that the Arroyo administration earns additional revenues of around P5.5 million daily for every P1 per liter increase in pump prices which explains why it does not want to scrap the VAT and control oil prices.

Meanwhile, official data from the Department of Finance (DOF) show that in 2007, government collected P29 billion from the VAT on oil and P11.4 billion from power.

The groups also slammed the DOF for saying that cancelling the VAT on oil and power will “impair the delivery of services” by government.

“When the DOF pushed for the imposition of the VAT on oil and power in 2005 due to pressure from the International Monetary Fund (IMF), social services were never in the equation. Their primary concern then, and now, was the country’s credit worthiness. They wanted to assure foreign creditors that government can pay its debts, not to raise more funds for public hospitals, housing or education,” Padilla pointed out.

He added that if government truly intends to ease the people’s burden, one of the most urgent and doable policy reforms is the removal of the VAT on oil and power to immediately bring down their costs.

Padilla said that they will submit the signatures to the House of Representatives which has been conducting hearings on various proposals to scrap the VAT on oil and power.

The signature campaign will continue in the coming days in different public places around Metro Manila. #(PinoyPress)

Editorial Cartoon: Freeing the Beast

May 26, 2008

Pinalaya na si Erap.  Pinalaya na si Manero.  Pinalaya na si Jalosjos.  Wala nang balita kay Smith.  Tapos ngayon, papalayain na rin ang mga malalaking kmpanya ng langis.

On Zero Oil Tariff Cut: Relieve Consumers, Not Oil Firms

May 26, 2008

Written by IBON Media Independent think-tank IBON Foundation criticizes the Department of Energy and Malacañang for passing the zero oil tariff cut, saying that reduced tariffs in the last three months has resulted in even higher prices of oil products. Since the oil tariff was reduced from 3% to 2% in February and 2% to 1% in May, gasoline and diesel prices have increased 11 times to a total of P7.50 per liter. There were two rollbacks of P1.50 per liter for diesel and P1.00 for gasoline presumably brought about by the tariff cut. But since then, pump prices have actually increased by a net of P6 per liter.

The DOE announced yesterday that starting June, imported oil products will enjoy zero tariff cut. It admitted though that the scrapping of oil tariffs would result only in a reduction of P0.50 per liter in pump prices. But local oil firms recently announced that they are looking at a P1.50 per liter increase in diesel prices and P1.00 per liter for gasoline following news world oil prices had hit US$135 per barrel, debunking government argument that the oil tariff cut will bring down oil prices.

Moreover, by choosing to remove tariffs on oil imports, government protects the interests of the oil firms at the expense of potential revenues that should be used to fund vital social services.

IBON maintains that the removal of the VAT on oil is still a more effective solution to the high oil prices. Removing the VAT on oil will immediately bring down pump prices by as much as P5 per liter and directly relieve the consumers, unlike the oil tariff cut that only relieves oil companies from paying import duties. (end)

Study Other Revenue Measures Outside VAT, Gov’t Urged

May 26, 2008

Written by IBON Media Malacanang consistently refuses to repeal the reformed value-added tax (RVAT) on oil and power saying that it will harm the country’s revenues. But according to independent think-tank IBON Foundation, there are measures that government can implement which are less burdensome and can generate more revenues than the RVAT. These measures include improving revenue performance, which according to the National Tax Research Center, could earn the government an average of P57 billion annually in uncollected VAT on items other than petroleum products and P82 billion in uncollected corporate taxes as of 2006.

If government increases its tax collection efforts from 14% of the gross domestic product to 16%, this can produce at least P94 billion in a year. These revenues are more than enough to cover the revenue losses from the removal of VAT on oil and power.

Removing the RVAT on oil and power will also help mitigate the significant supply-side pressure on inflation due to high global oil prices and may decrease the inflation rate by 0.5-0.8 percentage points, especially since global oil prices are expected to continue increasing at least through 2008, with improvement only in 2009.

Raising revenues through a regressive VAT is convenient only for the government, which amid the spiraling cost of basic goods and services, should implement revenue-generation measures that do not unduly burden the poor Filipino majority– which is unfortunately what the regressive VAT does. (end)