JUNK VAT HIKE - JOKER
MANILA, January 31, 2005 (STAR) By Jess Diaz - Maverick Sen. Joker Arroyo urged President Arroyo yesterday to recall the bill increasing the value added tax by 20 percent, saying it is dividing lawmakers and the entire population."It might be worth for the President to ask for the recall of the House measure on VAT because whatever the outcome would be in the Senate, it’s not worth the political price it will cost her," he said.
Arroyo, who is not related to the President, belongs to the pro-administration majority bloc in the Senate. Although he is generally supportive of Mrs. Arroyo, he has frequently criticized her.
Most senators, including Senate President Franklin Drilon, agree that the 20 percent increase in the value added tax, from 10 percent to 12 percent, would result in a new round of adjustment in consumer prices at a time when the cost of electricity, water, gasoline, diesel, and almost everything is rising.
"This bill is very divisive," Senator Arroyo said. "Those in the House who voted for it did so grudgingly out of whatever remains of party loyalty, and in the Senate, there will be a lot of conscience votes within the majority."
He said he could not understand why the House gave higher priority to the VAT increase "which will directly hit consumers, particularly the lower classes," than to another bill removing the VAT exemption that certain groups of taxpayers, including power producers and oil companies enjoy.
"The House studiously did not touch the more important exempted list of entities that can well afford to pay and had long been given tax sanctuary," he stressed.
Arroyo made the appeal for the President to have the VAT hike bill recalled on the eve of the start of the Senate hearings on VAT-related bills.
"Let the arguments begin," Sen. Ralph Recto, ways and means committee chairman, said yesterday as he vowed to conduct "exhaustive and open" consultations on the measures.
He said various sectors would be consulted on two measures: Increasing VAT by 20 percent and removing the exemptions.
Private sector representatives and business leaders, including consumer and oil price watchdog Raul Concepcion, have been invited to today’s hearing. The government panel would be led by new Finance Secretary Cesar Purisima and Economic Planning Secretary Romulo Neri.
Recto has one advice to his guests: "It is not enough that you oppose, you must also propose. If VAT is unpalatable, then what is your alternative. We won’t be swayed by ‘just don’t pay our debt’ argument. To the government, our suggestion is to please come up with creative solutions. Don’t be fixated by the single-VAT rate straitjacket," he said.
The Senate’s principal taxman is apparently grudgingly starting consultations on the VAT bills.
He said he and members of his committee would sit as "impartial jurors" on these measures.
Drilon made a similar appeal for those opposed to the VAT increase to suggest alternative measures, though his plea was particularly addressed to the nine members of the Senate minority, Senators Arroyo, Manuel Villar Jr., Ramon Revilla Jr., and Majority Leader Francis Pangilinan.
"I agree that we should not impose more tax burden on our people during these difficult times. But even those in the opposition also agree that there can be no debate that we need P80 billion in additional revenues so that we could bridge the budget deficit and put our fiscal house in order," Drilon said.
He said the proposal of Senator Arroyo and the minority for power producers, oil companies and electric cooperatives to be levied the VAT would result in an increase in the prices of their products as VAT is a "pass-on tax."
Reported by: Sol Jose Vanzi
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