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Friday, January 28, 2005
5 of 7 Cebu reps vote for VAT hike
CEBU CITY -- Five of seven lawmakers speaking for Cebu in the Lower House voted in favor of raising the value-added tax (VAT) to 12 percent, a proposal that was approved on final reading at dawn Thursday.
"Nobody wants it, but we have to bite the bullet now," said Deputy Speaker for the Visayas Raul del Mar (Cebu City, north), who presided over the session.
According to the House Journal Service, the Cebuano lawmakers who supported the VAT Restructuring Bill were Representatives del Mar, Eduardo Gullas (Cebu Pro-vince, 1st district), Simeon Kintanar (2nd district), Antonio Yapha (3rd district) and Nerissa Soon-Ruiz (6th district).
Representative Antonio Cuenco (Cebu City, south) was absent, but said in a phone interview that he was against the proposal.
The House Journal Service had no record of how Representative Clavel Asas-Martinez (Cebu Province, 4th district) voted and Sun.Star's repeated calls to her mobile phone last night went unanswered.
After Joseph Durano's appointment as tourism secretary, the province's fifth district has no representative to the House for now.
Coverage
By the time the bill got approved by the House at 3:45 a.m. Thursday, the vote stood at 126 in favor, with 11 against.
The two percent VAT increase is expected to raise between P35 billion and P60 billion in revenues.
House Speaker Jose de Venecia said the bill provides for "safety nets" by exempting basic goods like rice, corn, fish (bangus, tilapia, galunggong), eggs, noodles, fruits, beef, pork and chicken.
Under the Expanded VAT Law of 1994, this tax is collected from hotels, restaurants, lending investors, taxi or car rental companies, telephone and media franchises, transport of goods, real properties, meat importations, advertisements and processed gas, among others.
Same burden
The Freedom from Debt Coalition in Cebu swiftly condemned the passage of House Bill 3555.
"Through the VAT, the poor would pay the same amount of tax as the rich for every commodity they consume," said the statement signed by secretary-general Lito Vasquez.
Cuenco did not see eye to eye with his pro-administration partymates on the two percent increase, describing it as "burdensome" to the poor.
"There is no guarantee that the Senate will approve the provision that exempts certain commodities," he told Sun.Star Cebu in a mobile phone interview Thursday night.
He said an intensified tax collection effort is a better answer to the budget deficit, not another tax bill.
Del Mar, however, said the critical issue is raising revenues.
"We the leaders have to do something even if it is not popular, for as long as it is right. If we do not put that measure in action now, our economy will collapse," he said.
Not staggering
Asked to explain his vote, Kintanar said: "I voted yes because the increase is minimal. Dili kaayo staggering."
Yapha agreed with Cuenco on the need to intensify tax collection, but said that increasing VAT is necessary to allow the government to trim its budget deficit.
"Pamasin na lang gud ning atoa kay nag fiscal crisis man kaha ta," he said.
VAT was first suggested by the World Bank in 1984 to help the country simplify its tax system and broaden its tax base. As value is added, VAT is collected from each stage of production or transfer of goods or services.
The tax is computed by multiplying total sales by the VAT rate.
However, VAT paid by a VAT-registered person on his purchase or importation of goods or services (input tax) is deducted from the tax due on his own sale of goods and services (output tax). (Sun.Star Cebu)
(January 28, 2005 issue)
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House okays VAT hike from 10% to 12%