Saturday, November 08, 2008 Roperos: Direct rural assistance
REPORTS say that the Department of Finance (DOF) has expressed reservation over a bill filed in Congress that provides tax breaks to “local water districts and electric cooperatives.” House Bill 5210, now on second reading, provides that local water districts “should not pay income tax because they serve governmental functions.”
Removing the income tax burden from electric cooperatives would help bring the cost of power in the towns. Note that the bulk of the nation’s poor, is in the countryside.
All these years, our nation’s leaders have been talking about eradicating poverty. Yet, a great majority of low income inhabitants are in the rural areas, especially farmers and fisher folk. They would be greatly benefited from House Bill 5210.
Under the bill, the so-called systems loss that electricity generation, transmission and distribution companies charged to their consumers would be exempt from the value added tax.
Likewise, the sale of electricity to marginal consumers—households that consume 100 kilowatt hours or less a month—should also be exempted from paying VAT. This provision of HB 5210 would effectively help improve the quality of life of the rural folk. They have always been the last to enjoy a better life in the nation’s growth.
One other sector that would benefit from the bill’s passage is the senior citizen. The bill reportedly carries a provision that exempts from VAT the purchases of senior citizens. This would give substance to the law that gives senior citizens 20 percent discount for their purchases of medicines, food from restaurants, etc.
Another provision is the one allowing private firms to deduct 60 percent of the value of their “donations to calamity-torn areas from their taxable income.”
The reservation from the DOF, it seems, stems from the belief that the government could best extend services to the less privileged members of the national society “by collecting more taxes and using the money to fund more social services and infrastructure projects.”
But still, there is no better substitute than extending the assistance to the beneficiaries to directly enjoy.
HB 5210 is reportedly now being scheduled for the third and final reading. If passed, and approved in the Senate, it could be considered as the nation’s socio-economic development finally seeping down to the low income inhabitants of the republic.
