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Thursday, October 20, 2005
Gas prices to go up; can power, fuel be de-listed?
Higher gas prices and fares are expected when the reformed value-added tax (R-Vat) takes effect next month, which could set off other price increases in consumer products and services.
With employees bracing for a cut in the purchasing power of the peso, the Trade Union Congress of the Philippines said they might ask for another pay raise.
Energy Secretary Raphael Perpetuo Lotilla admitted that the R-Vat will push prices of oil products up by 81 centavos per liter for diesel, P2.93 for unleaded gasoline, P2.35 for regular gasoline and P2 for kerosone.
For liquefied petroleum gas (LPG), the projected increase is P35.86 per 11-kilogram cylinder.
Here in Cebu, gasoline could likely hit P40 per liter, said Johnson Samson, president of the Cebu Petroleum Dealers’ Association of Shell Pilipinas.
Small and medium enterprises will also take a hit from R-Vat, but business leader Roberto Go said the tax measure is needed to improve the investment climate.
However, Lotilla said there will be no increase in the costs of power and fuel until after the Bureau of Internal Revenue and the finance department have issued R-Vat’s implementing rules and regulations in November.
He also said the tax measure will not result in higher transport fares, because it has been factored into the two-peso increase for Luzon and one peso for Visayas and Mindanao.
Relief
The government is also providing relief by removing the excise tax for diesel, kerosene, bunker fuel and regular gasoline and reducing tariff duties for all oil products.
The Visayas Association of Ferryboat and Coastwise Service Operators (VAFCSO), however, warn-ed that they will raise passenger fare and freight charges.
Capt. Jeffrey Solon, president of VAFCSO, said they can automatically increase fares and fees because they are allowed to do so under the law.
The Supreme Court lifted last Monday the restraining order on the R-Vat law, saying the tax measure is constitutional.
Cebu City Rep. Raul del Mar co-authored the bill that would have sought the suspension of the R-Vat’s implementation for another year.
As a last recourse, del Mar said he will just propose an amendment to exempt electricity and power from the tax, but he will not get his hopes high that it will carried.
“I don’t know if I can get enough support to swing it because when we deliberated on the law, there were very few of us who were against it. And you know how it is in Congress, this will take time,” he told Sun.Star Cebu yesterday.
Protest
Although there are expectations that the prices of basic commodities will go up, TUCP spokesman Alex Aguilar said they have to assess the impact of the law before they will make any moves.
Labor groups protested yesterday the tax law, which they say will result in job losses and increased unemployment.
Members of Partido ng Manggagawa (PM) held a rally in front of the Bureau of Internal Revenue building in Banilad, Cebu City to call for tax exemptions on minimum wage earners.
Dennis Derige of PM-Cebu said they are condemning the Supreme Court’s decision since it will add to the financial burdens of ordinary workers.
Nick Igot, spokesperson of Ama Sugbo-Kilusang Mayo Uno, said they will hold a vigil in front of the Energy Regulatory Commission office at the Metrobank Plaza on Osmeña Blvd. tomorrow.
They are criticizing the agency for its failure to protect consumers from rising energy costs.
Spending
The Coalition of Cebuanos Against Gloria will also gather outside Malacañang sa Sugbo tomorrow to demand for the President to step down and to oppose the R-Vat.
But for Mayor Tomas Osmeña, as long as the additional taxes will be used immediately to create more and better services to the public, the R-Vat is good for the people and the government.
The poor people may be paying more once the R-Vat law is implemented, but the rich will also be paying a lot more, he said.
“If these taxes will end up being used for better services for the people, then good, because right now, most of the taxes go to salaries, when there are no medicines in the hospitals or infrastructure,” Osmeña lamented.
“Government should convert all this extra money as quickly as possible into services, then it’s not so bad. But if mogawas na kuwang lang gihapon ang serbisyo, then it’s very bad,” he continued.
(CYR/LCR/EOB/JGA/Superbalita/(Sunnex)
(October 20, 2005 issue)
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