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THE
Department of Finance (DOF) came under fire at the
Senate Thursday for prematurely shooting down Sen. Mar
Roxas II’s recommendation to temporarily suspend
collection of the expanded value-added tax (E-VAT) on
oil without careful study and public consultations on
how it would impact on the country’s fiscal outlook and
improve people’s financial conditions.
Appearing at the weekly Kapihan sa Senado media forum,
Roxas insisted that the proposed moratorium on the
oil-levy imposition could be “the best propoor policy”
that the government can immediately set in motion.
“We are
so quick in rejecting a proposal to directly ease the
burden of ordinary people at Christmas. I had hoped
they’d consider the relief this can give,” Roxas said.
Roxas
acknowledged the DOF’s estimates that the E-VAT on oil
amounts to about P40 billion a year and a six-month
suspension would have a revenue impact of about P20
billion. But he added: “Let’s compare this to revenue
losses due to rampant oil smuggling and corruption. Why
should people be made to pay such a high price when
government cannot reduce its own inefficiencies in tax
collection?”
Roxas
recalled that when the VAT was being discussed in
Congress in 2006, world crude oil price was pegged at
$50 per barrel. “Today, world crude oil price has
reached $90 per barrel. Even on that basis alone,
government should have been actively consulting
different sectors on how to cope with these oil price
increases,” he said.
To
provide consumers an idea of how much savings will
redound to their wallets once the 12-percent E-VAT on
oil is suspended, Roxas noted, for instance, that
pump-price level of unleaded gasoline was only P37.25
per liter in December 2006 but is now priced at P44.45
per liter in December 2007, a difference of P7.20, or
an 19.3-percent increase. (Please see accompanying table
for the rest of the increases)
The
government, he said, is taking time to inspect the books
of oil companies to ensure a fair price on gasoline and
oil including LPG. “My advocacy is for a national
consensus to suspend the 12-percent EVAT on oil and
petroleum products for a period of six months just to
give the Filipino consumer a break from paying so much
taxes at a time of skyrocketing oil prices.”
Roxas
said he is ready to debate with any member of the
President’s economic team on the urgency and legitimacy
of his proposal. “The Finance department is too enamored
with its target of a zero budget deficit that it could
not even see or sense how many households are on the
brink of bankruptcy,” he said.
He
pointed to the number of OFW families who acquired loans
for appliances, education, and housing but may have
difficulty in meeting monthly amortizations due to a
strong peso. He noted the complaints of the transport
sector on how the high price of oil is eating into their
daily profits. |
