Mar Roxas: Who says VAT is only source of revenues?

July 10, 2008

BY JP LOPEZ - THE government should stop deceiving the public that the 12 percent value-added tax on oil is the only source of funds for its pro-poor programs, Sen. Mar Roxas II said yesterday.

“Are we relying solely on VAT on oil to implement these pro-poor programs and at the same time, to cut the deficit? Are they telling us that this VAT on oil is the be-all, end-all of our collection system?” Roxas asked.

Instead of relying too much on the oil VAT, Roxas said the government should implement efficient tax collection and review its spending program, and re-channel funds from items that are “usually there but actually useless to the people,” to programs aimed towards immediate relief and ensuring food security.

“Pinalalabas na nakasalalay sa VAT sa langis ang silbi ng gobyerno, na kapag nawala ito ay wala na silang magagawa. Samantala, hindi pa naman nalulubos ang iba pang paraan para magkaroon ng dagdag na pondo ang gobyerno para sa mga programa nito,” he said.

Roxas recalled that imposing VAT on oil products was not originally part of the government’s plan to save itself from a fiscal crisis. When oil was finally subjected to VAT, Dubai crude was just $30 a barrel, far from today’s $140 level.

“I reject that the government is helpless. I reject that the government cannot do anything else aside from what’s business-as-usual. The times call for the government to tighten its own belt, not continue tightening the noose on an already choking economy,” Roxas said.

In reviewing the budget, Roxas suggested among others the suspension of new construction because these have relatively higher leakages, longer gestation periods due to tedious bidding processes, and lower employment generation.

“It’s better to accelerate maintenance or rehabilitation of existing projects because these are labor-intensive, so we’re sure the money goes to workers, not to foreign consultants,” he said.

Roxas also suggested suspending expenditures of the road users tax, “where there is little accountability and benefit,” and realigning it to food for work or school programs.

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