TWO of the country’s economic managers are open to studying the proposed cap on the value-added tax (VAT) on oil, but they would rather that the current tax system be kept in place to ensure that government programs remain well-funded.

Budget Secretary Rolando Andaya Jr. said it may not be a good idea to discuss the proposed shift to new form of oil taxation at this time, as “emotions” are likely to drown out rational deliberations on the measure.

“We can study the effect. But then again, with regards to shifting to another regime of taxation, it might not be good in the middle of this crisis. At this time, emotions will prevail. We should talk about this in the proper perspective, in the proper forum, not now in the middle of our problem,” Andaya said in an interview at the Palace Reception Hall.

He said it would be best to stick to the Vat on oil, especially as extra proceeds are “immediately given back” to the people.

“Whatever extra revenues the government makes are given back through subsidies that are immediately obtained by the intended beneficiaries,” he said.

Finance Secretary Margarito Teves said in another interview that the Department of Finance (DOF) has not yet studied the proposed measure, which seeks to put a cap on Vat on oil and convert it into a specific tax that would keep the tax at the same level when oil prices increase.

“We have not studied it. We’d like to study it. I don’t have any comment on that for the meantime,” Teves said.

Asked whether the DOF is open to the proposal, considering that it deals with Vat on oil windfall, Teves said: “We will see. Apart from the substance, we will see how, administratively, it is going to be handled. With regards to the cap, sometimes it’s not easy to determine that, at what stage [will it be imposed],  so I’d rather go through the whole thing before I can discuss this more intelligently.”

The finance chief said that “for the meantime, we’re hoping [the Vat on oil] will continue because they are additional resources that we need for additional requirements of the economy given the very difficult and challenging conditions.”

Antique Rep. Exequiel Javier proposed to fix the level of Vat collections on oil imports at $100 a barrel, which would still allow the government to generate P18.7 billion in annual revenues while providing direct subsidies to fuel consumers.

Javier, who was in Malacañang to attend the signing of the law granting tax exemption to minimum wage earners, said his proposal will ensure that the government maintains its expected revenues from Vat on oil.

THE Senate ways and means committee will start public hearings next week prior to crafting legislation to plug leaks in the collection of customs duties and taxes from imported goods.

Oil VAT cap ‘possible’

TWO of the country’s economic managers are open to studying the proposed cap on the value-added tax (VAT) on oil, but they would rather that the current tax system be kept in place to ensure that government programs remain well-funded.

MONETARY authorities are keeping an eye on countryside credit policies and programs as their role in helping the country achieve rice self-sufficiency is considered paramount.

THE peso yesterday gained 60 centavos against the dollar mainly from profit-taking as banks shortened long dollar positions on expectations the government may hike interest rates again to curb inflation, currency traders said.