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Tuesday, September 20, 2005
Espinoza: Making the E-VAT bearable
By Fred C. Espinoza
ASSURANCE. It’s about time we see positive signs that the government is really doing something to make the possible implementation of the expanded value-added (E-VAT) law bearable for the people.
The first assurance came from Finance Secretary Margarito Teves who issued a formal statement earlier that “the government is willing to forego P20 billion worth of potential revenues as part of several measures to mitigate the impact of skyrocketing oil prices and the possible implementation of the (E-VAT) once the freeze order is lifted.”
He further said “the government had laid down several measures to cushion the impact of escalating prices of petroleum products and commodities.” The Supreme Court (SC) is likely to hand a decision within the month, the report said.
According to Teves, the measures include “the removal of the excise tax slapped on diesel, kerosene and bunker fuel, as well as the reduction of the import duty on petroleum products, except for liquefied petroleum gas (LPG), to three percent.”
He also made it clear to all that the lifting of the excise tax slapped on petroleum products and the reduction of tariffs on imports would take effect immediately once the SC lifted the temporary restraining order on the implementation of the new E-VAT law. To recall, the high tribunal issued on July 1 an order freezing the implementation of Republic Act 9337 or the Expanded Value-Added Tax Act of 2005.
The new law was supposed to raise P28 billion to P31 billion this year if it had been implemented last July 1 and another P97 billion to P105 billion next year once the E-VAT rate is increased from 10 percent to 12 percent.
To wrap everything in the new law’s favor, top officials of the departments of finance, trade and industry, energy and agriculture are going around the country “on a road show to explain the E-VAT to entrepreneurs and consumers and correct misconceptions about the law,” Finance Undersecretary Emmanuel Bonan told reporters recently.
Bonoan said the government would also come out with TV and radio advertisements on the E-VAT, what people can expect once it is implemented and how they can report abuses. At the “Kapihan sa Sulo” forum recently, the finance undersecretary was frank enough to admit the urgent need to address a lot of misinformation and misconceptions about this law. He added:
“We also would want to get our side out.” With these on- going developments in mind, it would be safe to conclude that the administration’s management team has been valiantly holding on to the fort, so to speak, while President Arroyo was out for a historic mission—“to champion debt relief for the poor nations at the historic United Nation’s summit meetings in New York last Thursday.”
You add these historic events abroad to what the administration is trying its best to accomplish at home, while the President is away to fulfill an obligation to the international community of nations, one can safely conclude that the moment has come for people of goodwill in this country to put to rest the political question lurking in some political quarters—on whether the President can still govern effectively—following the failed impeachment charges in the House of Representatives.
As if to add more meaning to the efforts exerted by her management team at home to keep the economy on track, President Arroyo made known to the world leaders that the levy on energy and petroleum products at home can wait while waiting for the world oil price hike to stabilize at a comfortable level.
There were reports earlier that the domestic road show that started last week in Davao was attended by some 700 representatives of small and medium enterprises. In Clark, Pampanga, some 1,000 people gathered for the E-VAT forum.
Cebu was also scheduled for the road show, followed by Baguio later in the week, Bonoan said. The P15 million budget for the information drive is included in the reformed VAT law or RA 9337, he said.
(September 20, 2005 issue)
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