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Wednesday, November 02, 2005
City warns traders: Jack up prices, lose permits
CEBU CITY -- Traders who will take advantage of the Reformed Value-Added Tax (RVAT) Law and unreasonably jack up prices of goods can expect to be embarrassed by the Cebu City Government, or worse, lose their business permits.
The Cebu City Price Monitoring Council will convene tomorrow and check the immediate effects of the RVAT on basic commodities and other consumer goods, City Administrator Francisco Fernandez said.
To help consumers cope with the additional taxes, Fernandez said they will focus on informing the public and merchants of the prevailing price ceiling of basic commodities, as monitored by the Department of Trade and Industry (DTI).
Aside from the basic food items, the price of medicine will also be monitored, said Fernandez, chairman of the monitoring council.
To encourage fair trade practices, Fernandez told Sun.Star Cebu that they will put up billboards in key areas in the city that will inform the public where they can buy cheap goods and where the same goods are sold at a higher price.
“We will even name the establishments that are overpricing their goods to inform the public and hopefully to stop the establishment owners from implementing unwarranted price increases,” Fernandez told Sun.Star Cebu.
The Arroyo administration has said it needs to raise revenues to fund education, health and environment projects and agricultural modernization.
In a separate interview, Councilor Arsenio Pacaña said he will suggest to the City Council to summon owners of establishments who may take advantage of the RVAT.
“We have control over the issuance and revocation of business permits. So if you’re operating in the city and you’re profiteering, then it’s possible for us to revoke your permit,” Pacaña said Tuesday.
Gas up
Gas stations in Cebu City raised the prices of their fuel products starting midnight Tuesday, the day the RVAT Law took effect.
A check with different gas stations yesterday showed that the increase in the prices of liquefied petroleum gas (LPG) ranged from P24 to P28.
LPG tanks of Petron, Caltex and Shell now cost P510, P479 and P515, respectively.
Fuel prices, on the other hand, had increases ranging from P0.15 to P3.70 per liter.
Under Republic Act 9337, petroleum products, power and electric cooperatives, air and sea transport, non-food agricultural products and services of doctors and lawyers are subject to a 10 percent VAT.
However, the Visayan Electric Co. (Veco) has not yet released information on whether it will charge consumers with the additional tax.
Veco spokesperson Ethel Natera said they are still waiting for the Energy Regulatory Commission’s instructions on how and when the tax measure will be applied.
Under 10%
She said in a meeting with ERC and Veco officials last week, it was still unclear whether they will start charging their clients the VAT based on the consumption starting Nov. 1 or the date of the printing of the bills.
According to a Department of Finance advisory published in a national daily yesterday, with the government’s aim to mitigate the impact of the RVAT on power rates, the franchise tax on power distribution utilities was removed so the increase in power rates is less than 10 percent.
The advisory included Veco, which is expected to raise rates by 4.8 percent, assuming a 70 percent zero-rated generation for the National Power Corp.
In a press release, the ERC said the new tax measure will be implemented based on gross receipts on sales and services of electricity by generation, transmission and distribution companies.
It said the abolition of the two percent national franchise tax will cushion the impact of the 10 percent VAT.
Utility firms, however, are still not exempt from the local franchise tax imposed by local government units under the Local Government Code.
Gas lines
However, widower Ciriaco Sabucido, 71, a security guard of Hipodromo Elementary School, was happy that despite the implementation of the RVAT yesterday, power connection fee for his wife’s tomb at the Carreta Cemetery was lower this year.
He said that from last year’s charge of P175 for three days, the rate was reduced to P170 this year.
Other Cebuano motorists also made sure to fill their gas tanks before the RVAT took effect Tuesday.
Shell pump attendant Marilyn Abello said that starting 7 p.m. last Monday, many customers had their gas tanks filled.
Shell’s Diesoline, Super Unleaded, Super Premium and Velocity now cost P0.15 to P2.53 higher.
Caltex raised the prices of its diesel, Vortex Silver and Vortex Gold to P35,05, P40.32 and P41.16, respectively. The increases ranged from P1.34 to P3.70 per liter.
Fares up
Petron raised prices from P0.23 to P2.50 per liter. Its diesel, unleaded, Petron Blaze and Petron XCS brands now cost from P33.99 to P40.61 per liter.
Philippine Airlines and Cebu Pacific have already come up with higher fares, with the increase reaching at least P300.
Ship owners based in Cebu also adjusted their fares and freight charges.
In a proposed resolution, City Councilor Edgardo Labella requested the price monitoring council and the DTI to closely monitor and enforce the prevailing price ceiling of all basic commodities, including petroleum products.
He said a no-nonsense campaign to protect the consumers’ welfare will send a message to the business community to observe the prescribed price limits of all basic food products. (Sun.Star Cebu/Sunnex)
(November 2, 2005 issue)
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