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INSTEAD
of suspending or lowering the percentage of the
12-percent value-added tax (VAT) on crude oil products
in the face of rising domestic prices of essentials, the
Consumer and Oil Price Watch (COPW) suggested that VAT
collections from oil imports be used to help the poor.
This, as
the Senate ways and means committee is ready to render a
report endorsing proposals to scrap entirely, instead of
simply suspending, the imposition of the 12-percent
value-added tax on oil products and electric
consumption, according to its chairman Sen. Francis
Escudero.
The COPW
identified another source of its suggested subsidy as
the royalties from Malampaya gas production.
“The
12-percent VAT on petroleum products must be retained
instead of our earlier proposal to lower it to 6
percent,” said businessman Raul Concepcion, price watch
chairman.
One way
of doing this is to grant the Department of Agriculture
a higher budget for rice subsidy and a liquefied
petroleum gas (LPG) discount equivalent to the VAT on an
11-kilo LPG tank to poor households that use no more
than one LPG tank a month. The COPW estimates the
discount to be about P45.40 from the current price of
P579, thus lowering it to P529.50.
Concepcion
said the list of the life-line customers of Manila
Electric Co. is a good source of identifying households
that could qualify for such an LPG discount. These
Meralco customers are those that do not consume more
than 100 kW hours a month and number about a million.
Appearing at the weekly Kapihan sa Senado media forum,
Escudero, meanwhile, confirmed that the ways and means
panel that he chairs had already prepared a draft
committee report not just suspending, but doing away
with, the VAT on oil and power as part of a proposed
economic-stimulus package the government may adopt to
augment the people’s purchasing power as prices of basic
commodities soar.
“Those
who wish to call simply for a suspension may air their
views at the plenary deliberations. If you start with
just suspension, then there’s no longer any hope of
removing that,” he said, expecting spirited debates on
the measure when it is submitted for floor
deliberations.
But
Escudero explained that the Senate must await approval
of a counterpart measure in the House of
Representatives, where all tax bills must originate, as
provided in the rules. But once the “scrap-VAT” proposal
reaches the Senate floor, Escudero said he prefers to
start the debate on removing it entirely before they
negotiate to simply suspend its imposition.
“This
[scrap-VAT bill] is supposed to be included the
economic-stimulus package of the government to assist
Filipinos reeling from high prices of oil, food and
other necessities,” he said.
He said
the state would not lose so much revenue from the
scrapping since the modest relief people will get, on
top of any wage hike they might get, will still go back
to the economy and the government as they purchase their
essentials.
Escudero
estimated that the economic-stimulus package should not
be lower than 5 percent to 7 percent of the annual
national budget.
For
2008, he noted that the capital outlay based on the
budget would amount to about P150 billion.
Concepcion, meanwhile, reiterated his proposal to the
Department of Energy to publish every Monday the oil
products price matrix every Monday because it will help
determine whether oil companies have under or
overrecoveries, as well as determine whether there is
justification to increase local pump prices.
This is
because such publication would show the actual
inventories of the oil companies that form the basis for
determining if they have underrecoveries or
overrecoveries on their oil prices—60 to 90 days
inventory for refiners and 15 to 30 days inventory for
importers. |
