Government told to cut VAT not fuel subsidy

Tuesday, February 7, 2012

WITH the skyrocketing prices of oil products in world market, Zambales Representative Mitos Magsaysay pushes for temporary cutback of value added tax (VAT) instead of focusing on the Pantawid Pasada subsidy program for public utility vehicles that only benefit a small part of the entire sector.

Magsaysay said the government will not suffer too much from this move as the VAT collection will normalize as soon as the world market prices stabilize.

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The Department of Energy (DOE), she stressed, can come out with a projection on how long the unstable prices in the world market will continue and they can implement the temporary reduction for that period.

“At least, consumers will be shielded from the full wave of the increases just as they are now, so we won’t need to find solutions every time oil crisis happen,” Magsaysay added.

The lawmaker believed that even transport groups are up over the “ineffectivity” of the campaign due to problems with its implementation and if the government agrees to reduce VAT on petroleum products, it could mean the prices would be reduced for all as there will be less taxes to pass on to the consumers.

Many of the public utility vehicles in Cagayan de Oro expressed dismay and felt bad with the Pantawid Pasada subsidy program of the government saying that only operators at the same time drivers are enjoying the program.

In fact, there are PUV drivers who tried repeatedly to get the subsidy but failed. And the subsidy that drivers got was too little.

“The program does little to provide relief to the public and it leaves unharmed the super profits of the oil cartel,” Nonoy de la Vega, a PUJ driver said.