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Saturday, November 05, 2005
Carvajal: RVAT will benefit a few
By Orlando P. Carvajal
We are told that the urgent need of government is additional income to be able to service its huge debt and still have some funds left for basic services. We are further told that the Reformed Value Added Tax (RVAT) is the solution.
The problem, however, of most Filipinos is how to raise their income levels to be able to eke out a living in a situation of spiraling prices brought about mainly by poor governance. For these people, RVAT is not a solution but an aggravation to their problem because it will definitely increase the prices of commodities some more.
It is easy to imagine our ruling elite making hard decisions for such up-in-the-air reasons as “the long-term macro-economic health of the country.” They live in the rarified atmosphere of ease and comfort and none of them, none of the elite in the other sectors in fact, really bite the bullet or swallow the bitter pill. Under existing social structures, they are secure in their positions of wealth and power no matter what.
It is only the ordinary Filipino that bites the bullet and suffers the lowering of the purchasing power of his meager income. The government might be right about the long-term macro-economic benefits of RVAT but try telling that to ordinary wage earners whose day-to-day expenses are out-pacing their incomes and who will be faced with more expensive basic goods and services with no additional income at hand.
If RVAT is indeed a bitter pill we have to swallow and if we do have to hurry with it, then the government should have first rushed the safety nets to protect the poor from its negative effects. The government should have rushed the guarantees that would ensure that big business, for instance, not only get a bigger dose of this bitter medicine but is also restrained from profiting some more from the situation.
The government has done nothing of the sort. It has only managed to make feeble attempts to convince poor Filipinos that RVAT is good for the long-term economic health of the country and to promise that it will protect the poor from the negative effects of RVAT. In short, the government has additional income with RVAT while the people have only full-page explanations and promises of safety nets in national newspapers.
In this country, whenever it is called for, only the poor have to make sacrifices because we do not have the economic structures needed to distribute wealth equitably. Hence, RVAT, under existing distribution structures, is guaranteed to benefit only a few.
Yes, RVAT will pay our debts but that does necessarily translate into long-term prosperity of the majority of Filipinos. Without structural changes, it could just increase, for instance, the take of corrupt government officials.
(November 5, 2005 issue)
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