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Thursday, January 27, 2005
Monsod scores Palace for VAT rate increase
Former socio-economic planning secretary Solita Monsod has blamed the “watered down” sin tax law for the need to increase the value added tax rate, which critics say will unduly burden consumers.
Monsod and Consumer and Oil Price Watch chairman Raul Concepcion agreed that government is being dishonest on the real impact of an increase in the value added tax rate to 12 percent from 10 percent.
She said if government had only passed the original version of the sin tax law, increasing the VAT would no longer be needed.
“Pag-itinaas ang tax, siyempre mawawala ang kanilang purchasing power, prices will go up. I don’t understand how they can say that the ordinary consumer will not be affected with the added VAT. I wish they will be a little bit honest,” Monsod said in an interview over ANC.
Concepcion, in a separate interview with ANC, said both the House of Representatives and the Senate do not have the data to support their target projections.
He said he will support the increase in VAT provided government can provide clear data for its targets and collections.
Raising the VAT rate was one of the suggestions of the UP School of Economics last year to save the econo-my from possible collapse.
The House of Representatives was set to pass the Malacañang-backed measure last night.
Meanwhile, Malaca-ñang reiterated its assurance that the proposed two percent increase in VAT on selected goods and services will not affect the prices of prime commodities.
Press Secretary Ignacio Bunye in a television interview said prime commodities, which constitute nearly 70 percent of what ordinary Filipinos buy in the market, will be exempted from the increased VAT.
However, the measure pending in the House covers only the two percent increase in VAT. The VAT exemptions are covered in a separate measure.
Bunye said the prime commodities excluded from the proposed VAT rate hike include rice, corn, vegetables, fish, chicken and pork.
During the Legislative-Executive Development Advisory Council caucus held in Malacañang yesterday, the council members agreed to further expand the list of exempted items, he said.
The additional products to be exempted from VAT include noodles, bread, sardines and other commodities. (MVGalarpe/Sunnex)
(January 27, 2005 issue)
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