Roxas presses House to omit VAT on oil, electricity

May 16, 2008

Sen. Mar Roxas yesterday urged the House of Representatives to take its cue from the administration and start deliberations on proposals to suspend or remove the value-added tax (VAT) on oil products and on energy.

“Our economy is slowing down because everyday, the disposable income of every consumer continues to shrink due to high oil, food and energy costs. They are crying out for im-mediate relief which can only take place if we amend the VAT law,” he said.

While Mala-cañang claimed the other day to be studying the elimination of the VAT on oil products, which has caused pump prices to skyrocket, as well as a means of bringing down the high cost of electric power that has caused Filipinos so much misery, the Palace also claimed that the Department of Finance was against the idea of eliminating the VAT on oil products.

The Palace was also said to be against cutting off the VAT on power, saying that the high cost of electricity from the Manila Electric Co. is a result of Meralco misma-nagement and overcharging.

administration’s decision to study the implications of a reduction or elimination of the 12 percent VAT on oil and energy, the appropriate House committees can also hold public hearings on amendments to the VAT law, Roxas said.

“The administration is now looking at the implications of either reducing or scrapping the VAT on oil and on energy. That’s big leap from its original stance for an automatic rejection of a proposal to touch the VAT law. Ultimately, they have to heed the clamor of the people for the suspension of the VAT on oil as a way to keep the political and economic environment stable,” he said.

Roxas called on the House to bring the matter to the table and start hearing all positions, especially from the consumers, noting that while the Senate has already started deliberations on bills seeking to suspend or remove VAT on oil and energy, the Senate cannot move forward until the House approves its own tax measures.

Roxas, who is also the Liberal Party president, chided the Department of Energy (DOE) for claiming “helplessness” where in fact the Oil Deregulation Law gives it teeth against abuses in the pricing of oil products.

“DoE can do beyond more than just to check pump prices and ‘ask’ oil companies to justify their prices, it can summon and open their books, check oil inventories, examine their expense, among other acts that the Oil Deregulation Law empowers it to do,” Roxas pointed out.

“‘Deregulated’ does not mean that government is barred from exercising political will. It does not mean that the government is powerless, helpless, or toothless,” he stressed.

“Of course an antitrust law would help, and we in the Senate are working on that. But even now, the government should use its powers to their full extent rather than just whine about being ‘powerless,’” he added.

DoE secretary Angelo Reyes is seen as being completely clueless in matters of energy.

During the joint congressional hearing on power, the public was witness to Reyes’ inability to answer a single query from the legislators, calling on consultants and lawyers from the DoE to respond to the questions.

Earlier, Reyes called for a meeting of all the oil chiefs to discuss the problem of rising pump prices, and ended up saying that there was nothing he could do about the rising oil prices, saying the government is helpless in bringing down prices.

Reyes has no background in energy matters but has been appointed energy secretary by President Arroyo anyway.

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