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The politicians don’t just want your money. They want
your soul. They want you to be worn down by taxes until
you are dependent and helpless. When you subsidize
poverty and failure, you get more of both.
–James Dale Davidson, National Taxpayers Union (An
American antitax advocacy group)
WHEN
President Arroyo said last week that there wouldn’t be
new taxes, we were apprehensive because politicians
always end up implementing the opposite.
“Read my
lips: no new taxes,” said candidate George W.H. Bush
during the 1988 Republican National Convention. He ended
up eating crow and Americans having to pay more taxes
when he took power.
Indeed,
finance officials declared a few days ago that they were
looking for ways to enforce the 12-percent VAT on toll
ways. We use the term “enforce” because the expanded-VAT
law author says this particular service has always been
“VAT-able.”
Here’s
the rub: toll-way operators currently don’t pay VAT
since, they say, the old law doesn’t specifically tell
them to do so. So counterintuitively, Malacañang spin
masters thought that if the law doesn’t say so, it could
also mean the government is not prevented by the law
from collecting VAT from the toll ways.
It’s a
kind of creative and funny logic. We’d like to laugh but
we can’t because of its possible negative implications.
The government hopes to collect at least a billion pesos
but it’s not certain how much it would cost ordinary
Filipinos. It’s certain that toll operators would pass
the extra cost to consumers by raising fares.
Economically, that would mean higher transport costs to
vehicle owners and operators, which could cascade in
terms of higher bus and FX fares for commuters; higher
prices of fruits, vegetables, fish, meat and cereals as
viajeros are likely to pass on the cost to consumers;
higher cost of business to entrepreneurs big and small
on top of the already high transactions cost (read:
expensive electricity, high port users’ charges and high
cost of long-distance calls) that they currently bear;
and which could ultimately spell economic difficulties
to wage earners.
Of
course, finance officials—and even the VAT author, Sen.
Ralph Recto—are saying that the toll operators should
not pass on the tax to consumers because from the start,
they’ve been expected to charge VAT-inclusive fees.
Yet, on
the other hand, the operators, for instance, the
Philippine National Construction Corp. (PNCC) through
its spokesman, say they haven’t done so. And if the
State were to insist on enforcing it now, they’d have to
jack up the fees to include the VAT, and thus have to
seek permission from the Toll Regulatory Board.
Don’t
get us wrong. We want the State to have more money to
finance growth. And we’ve always stood for collecting
the right taxes, because in a country of scarce
resources, everyone should pull in weight. But we feel
that the revenue generated should be fair and just, and
this one is certainly not because of its potential
impact on the poor.
What
adds salt to injury is the fact that government taxmen
don’t really have to hit the toll ways had the ruling
party been diligent in working on the country’s
fiscal-reform program.
For
instance, the fiscal-rationalization bill has been
languishing in Congress. That tax proposal would have
added more or less P5 billion to the country’s coffers
without hurting the poor. And yet, Malacañang has not
lifted a finger to nudge its allies to ensure the bill’s
passage.
The
continuing failure of the government to reform the
incentive system could mean that the country would
continue to suffer a hemorrhage of at least P300 billion
a year in terms of forgone revenues.
And now,
the government simply wants the easy way out by shaking
the toll ways. It is this kind of mentality that is
destroying the country.
In
hindsight, the real issue here is probably not all about
taxes but governance—or the lack of it. If we take it
from, Sen. Ralph Recto, tolls are “VAT-able” and have
always been covered by the original VAT law. What
motorists are paying right now is already
VAT-inclusive—supposedly.
That
means we have always been paying VAT at the toll and
there’s no need to raise toll rates. If his presumption
is right, the question now is “where’s the money?” Does
it mean the toll operators like PNCC were collecting VAT
money and pretending it’s their money?
Yet the
way the PNCC spokesman responded to questions from
DWIZ’s Karambola hosts on Monday, it’s obvious
they never folded in the VAT into pass charges, so
there’s nothing to spit out.
Now, we
have a very complicated situation here and the
government, especially Finance Secretary Gary Teves,
should clarify this matter first, and urgently, before
even contemplating about shaking out the people at the
tolls. |
