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Wednesday, March 02, 2005
Dossier: Giving VAT a broader coverage
By Deputy Speaker Raul V. Del Mar
(First of two parts. This speech was delivered at the House of Representatives on Feb. 28,2005).
I vote Yes to House Bill No. 3705 or “An Act Amending Sections 106, 107, 108, 109, 110 and 111 of the National Internal Revenue Code, as amended, and for other Purposes,” which, in essence, gives VAT a broader coverage, as part of our critical response to the crippling fiscal crisis that now threatens the very survival of the country.
But more than the broader coverage, Mr. Speaker, I am voting for the additional safety nets, the measures adopted that collectively operate to significantly lessen the overall impact of the VAT on the consumption of the less fortunate and the fixed income earners.
I wish to stress that I signed Committee Report No. 370 in favor of the measure subject to the reservation that I will introduce specific amendments during the period of individual amendments.
The first amendment I introduced, Mr. Speaker, prohibited the pass-on or shifting of the VAT levied herein to the final purchaser or ultimate consumer on the sale of all goods and services. I am happy that the Committee accepted this concept of no shifting as part of its amendments.
However, while we wanted it applied to all sales of goods and services, the no-shifting prohibition was limited by the Committee to the sale of generated power and petroleum products by providing that “the Value Added Tax herein levied on the sale of generated power and petroleum products shall be paid, and absorbed by private and government-owned generation companies or seller of petroleum products, as the case may be, who shall be prohibited from passing-on the cost of such tax payments, either directly or indirectly, to any consumer in whatever form or manner, it being the express intent of this Act that the Value Added Tax shall be borne and absorbed exclusively by the power generating companies or by the sellers of petroleum products.”
We wish to make it of record that this no pass-on amendment was conceptualized by this representation with Hon. Teddy Boy Locsin and Hon. Salacnib Baterina, supported by the majority coalition during its caucus last Tuesday, Feb. 25, 2005.
We feel that, even with his limited no-shifting provision, we have achieved something already substantial under the circumstances. Protecting the ordinary household, as the ultimate consumer, from being burdened with the cost of tax payments made by sellers in sale of power generated and petroleum products is not something insignificant. (to be continued)
(March 2, 2005 issue)
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