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Thursday, September 01, 2005
Supreme Court says e-VAT is 'legal'
MANILA (Updated 5:46 p.m.) -- The Supreme Court (SC) declared late Thursday that Republic Act (RA) 9337 or the Expanded Value-Added-Tax (e-VAT) Law is constitutional and thus lifted the temporary restraining order (TRO) on the controversial tax measure.
Sorsogon Representative Francis Escudero, who is among the petitioners against RA 9337 said they are saddened by the SC's decision and lamented that the tax will be a painful burden on the people.
He said they will file a motion for reconsideration to the decision but he admitted that a reversal of the ruling would be difficult especially if it was a unanimous decision of the SC.
The decision comes two months after the high court stopped the implementation of the tax measure that imposes tax on certain commodities and services.
The SC also held oral arguments on the petitions questioning the legality of the e-VAT law. The government considers the law as the centerpiece program of its economic reform program.
With the expanded VAT law in place, the government hoped to wipe out the entire budget shortfall to zero by 2008 if it could earn P130 million in revenues per day.
Government lawyers earlier argued that the suspension of the implementation of the law, endangers the country's fiscal capability such that government would not be able to bring down the country's budget deficit from P187 billion to P160 billion at the end of the year. They said from July 1 until December 30, 2005, government could earn incremental revenues amounting to P25 billion to 28 billion.
If the suspension continues government stands to lose P150 million to P160 million every day that the expanded VAT is not imposed or about P4 billion to P5 billion a month.
Expanded VAT is an important aspect in the economic reform agenda of President Gloria Macapagal-Arroyo and without it government will not be able to deliver the promises that are necessary to improve the competitiveness of the county."
Meanwhile, the SC also declared former finance secretary Cesar Purisima in contempt of court and order him to pay a fine of P20,000.
Purisima earlier alleged that Malacañang influenced the SC to temporarily freeze the implementation of the e-VAT law, an accusation that the high court denied. (Sunnex)
(Reposted with updates)
(September 1, 2005 issue)
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