Roxas, Escudero urge govt to scrap VAT on power, oil
By Veronica Uy
INQUIRER.net
First Posted 17:36:00 05/05/2008
MANILA, Philippines -- Senators Manuel "Mar" Roxas II and Francis "Chiz" Escudero Monday urged the government to scrap the value-added tax (VAT) on power and oil.
"Stop electrocuting us with silly charges that hurt," said Escudero.
Roxas also urged the Lower House to approve income tax exemption for minimum wage earners. The Senate already passed its version.
The chairman of the Senate trade and commerce committee said that the tax exemption and the cheaper medicines bill were among the priority measures during the Legislative Executive Development Advisory Council meeting last April 22.
Roxas said the Lower House's plan to restructure the income tax system, with its "inherent complexities…could lead to further delays" in legislation.
The suspension of the VAT on oil is "becoming more and more evident" with the rise in world oil prices, he said.
"Our oil companies are now telling us that they will have to adjust their local rates by another P5.00 to P7.00. For every peso increase in diesel, our jeepney drivers lose P30.00 in earnings. What's our government's plan to help our countrymen?" he asked in Filipino.
"The triple whammy of higher oil, food, and energy prices requires a more responsive and decisive government," Roxas said.
Escudero said the VAT on systems loss partly explains the high cost of power in the country.
"It is bad enough that we pay for electricity that is lost to illegal connections and to heat, but coughing up an additional 12 percent tax to phantom power is too much," he said.
Escudero, who chairs the Senate ways and means committee, said VAT is meant to be a levy on goods and services, "on tangibles one receives and enjoys, not on imaginary things like electricity which has vaporized or vandalized."
He called the VAT on systems loss "a tax on theft."
"This is a case where the victim pays. While (a paying power consumer) doesn't pay the actual cost of what had been stolen from him, he becomes a victim twice over when he pays, by some weird logic, a 12 percent tax on the reimbursement that he pays on behalf of the thief."
Escudero urged the government to scrap the VAT on systems loss through a quick administrative action.
"Kung ayaw nilang tanggalin ang VAT sa kabuuan, sana man lang dun sa kuryenteng di na makita at nagamit ay huwag na nilang patawan pa ng buwis. At sana magkaroon ng seryosong pagtutulungan kung paano maiibsan ang nawawalang kuryente: mula sa pag-aayos ng sistema ng transmission at distribution, sa pagsupil sa mga nagnanakaw ng kuryente mahirap man o mayaman at seguridad sa power assets sa mga komunidad (If they don't want to scrap the VAT altogether, I wish they'd take it out from unused or stolen electricity. I also wish there would be serious cooperation on how to lower systems loss -- from fixing the transmission and distribution system to arresting power thieves, rich or poor, to securing the community's power assets)," he said.
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