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Tuesday, January 24, 2006
Teves assures 2% VAT to be spent on services
By Jessica B. Natad
Sun.Star Staff Reporter
Finance Secretary Margarito Teves is assuring the public that the two percent additional value-added tax (VAT) paid to government, as well as other government revenues, will not go to the pockets of corrupt government officials.
He said the different programs launched by the government, such as the Revenue Integrity Protection Service, Run After Tax Evaders and the Run After the Smugglers have been installed to ensure that the people’s money will go to infrastructure and social services.
Teves said one positive result of the increase in the VAT rate is the strengthening of the peso against the dollar.
He said, though, that a stable peso is better than having a strong peso value, which could have a negative impact on other sectors in the economy, such as exports.
Encourage
During a press conference after the inauguration of the Cebu Customs building last Saturday, Teves also encouraged Filipinos to ask for official receipts every time payment is made for goods and services covered by the VAT, as this is one way of making sure that the taxes will go to the government.
The government will begin collecting two percent additional VAT by February.
The increase in the VAT rate from 10 percent to 12 percent is one of the provisions of Republic Act 9337 or the Reformed VAT Law.
Teves said the increase is part of the government’s efforts to address the country’s budget deficit and to allow the government to sustain the delivery of basic services.
The government is expected to raise some P35.12 billion more this year with the VAT increase.
“This is expected to translate to the strengthening of the peso-dollar exchange rate and better interest rates arising from improved investor perception of the Philippines,” he said.
Forecast
Teves refused to issue a forecast on the reaction of the peso trading to the current news of government destabilization plots, saying there are other factors, such as dollar remittances of overseas Filipino workers (OFWs) that influence the value of the peso to the dollar.
He also said it would not be good for the economy to allow the peso to appreciate much, as this will lessen exportation activities and will discourage OFWs to send dollars to the country.
Earlier, Seaweed Industry Association of the Philippines president Benson Dakay said the seaweed processing industry incurred substantial losses in 2004 due to the unpredictable value of the peso against the dollar.
This resulted to the increase in the prices of the imported chemicals and fuel needed to run the manufacturing plants.
“We just want the peso to be stable at P55 because we have contracted our selling price in the international market for one year (based on the P55 value),” he said.
Cebu Furniture Industries Foundation Inc. immediate past president Jay Yuvallos echoed Dakay’s sentiments, saying exporters price their products based on a stable exchange rate.
For Bisaya stories from Cebu. Click here. (January 24, 2006 issue)
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