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By Sammy Martin, Correspondent
NEOPYTE Sen. Juan Miguel Zubiri on Monday joins
other legislators in asking the government to exempt fuel and
electricity from Value Added Tax (VAT) to cushion the impact of high
prices of prime commodities.
This, he said, is the best gift that the
government can give its people this Christmas season, echoing the
positions of fellow Senators Mar Roxas, Loren Legarda and Francis
Pangilinan, among others.
This gift, however, may be waylaid as the
Department of Finance has expressed reservations over this proposal,
as it will cut back substantially the revenue-generation campaign of
the government.
To make his dream come true, Zubiri filed Senate
Bill 1977 seeking the return of VAT-exemption of fuel and
electricity and put an end to the hardship brought about by VAT.
“Every peso raked in by government from
value-added tax [VAT] on fuel and electricity is an additional
burden shouldered by the consumer who pays VAT for every liter and
every watt,” Zubiri said.
He said government raised hefty revenues from
VAT. In 2006, total VAT collection was P76.9 billion, of which
P49.15 billion came from VAT on crude and petroleum products, or 69
percent.
Based from data posted by the Department of
Finance on the first half of this year, total VAT collection was
P43.7 billion, of which P18.6 billion came from VAT on crude and
petroleum products, or 43 percent.
Zubiri said VAT made crude and petroleum
products and electricity highly taxed commodities and whose high
prices effectively cascaded to almost all goods and services.
“Government’s and people’s wish lists are
poles apart. Consumers want lower prices of oil and electricity but
government wants bigger collection. We may forego traditional
Christmas lighting displays, travel less and trim our gift list.
Still, we end up spending more because of VAT, and, not just in
Christmas,” Zubiri pointed out.
The senator from Mindanao said “even if we
consume less of fuel and electricity, we could still end up paying
higher and higher taxes since VAT is based on value. In addition to
that, because fuel and electricity prices are oil-indexed, less
volume of consumption does not always translate to lesser
expenses.”
Consumer prices for the whole of 2006 and from
January to October this year shows consumer prices following on the
heels of oil prices, according to the National Statistics Office.
Prices of food, beverages and tobacco; clothing;
housing and repairs services; and fuel, light and water all
increased based on the price of oil.
“The VAT multiplies the rise in consumer
prices especially with peaking prices of oil hitting $100 per barrel
in the international market. Besides, we depend on imported oil as
our local production is only equivalent to half a day of our
requirements,” Zubiri emphasized.
He even cited a Department of Energy estimate
that shows a P1-per-unit increase in diesel price increases
generation cost of electricity, as follows: Luzon, 0.0002; Visayas,
0.0015; Mindanao, 0.0002;and, the Philippines, 0.0004. Likewise, a
P1-per-unit increase in bunker price increased generation cost, as
follows: Luzon, 0.0002; Visayas, 0.0198; Mindanao, 0.0659; and, the
Philippines, 0.0161.
“An increase in electricity rates leads to
rising cost of production, rising prices and rising consumer
expenditures. The additional 2-percent VAT imposed in 2006 increased
household expenditures by an average of 1.4 percent; prices of
commodities by an average of 1.8 percent, and total cost of
production by an average of 1.5 percent,” Zubiri added.
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