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FILIPINOS, in a sense, are not different from the readers of the
tabloids who lap up the stories about Elvis and UFO sightings. For
long, we have been suckered into believing the hopeless stories
about massive oil deposits supposedly lying untapped under our ocean
beds Or lying underneath some God-forsaken upland that holds gold
deposits just as massive.
But what do you expect of a people that up to
now are electrified by obvious tall tales such as a car that runs on
water?
Such kind of hopeless faith with the surreal is
probably the reason why there is no formed public opinion on the
current debate on which is the better mode of cushioning the impact
of the soaring crude oil prices on consumers. Do we scrap the EVAT
on oil products or do we cut down the tariff on imports?
The issue is critical but nobody, except for a
few ambitious presidential aspirants, are listening and
participating in the discussions.
Nobody bothers to look at the hard economic
data. Many are not aware that the issue is current. Nobody is
swamping the opinion pages and the radio talks shows with
suggestions and proposals on how to ease the impact of soaring oil
prices, with its across-the-board and savage impact on the economy.
The problem is the oil pricing problem would not
go away. Not now, not within the next few years. Not until cranks
who hold impressive positions such as Hugo Chavez are pushed off the
global stage and prevented from using their positions to build
social utopias cum sand castles out of their huge oil revenues.
These are our choices: Discuss them
intelligently now or face graver and more punitive consequences
later.
Suspending the EVAT on oil products while crude
oil prices are volatile and going upward is the mode of getting
instant relief from spiraling prices of oil. It is easy to
implement, according to Sen. Mar Roxas. It can be immediately
restored during low price regimes. With the oil price imports steady
at a certain yearly level, it is also easy to calculate the revenue
loss from such suspension.
Fiscal people can easily make adjustments from
the revenue loss arising from the suspension of the EVAT on oil
products. There is not much complex economic data to factor in and
digest.
With soaring oil prices roiling economies across
the globe, the Philippine government—without losing its moral
bearing—can easily raise the revenue loss from the EVAT suspension
by charging that loss on sectors that otherwise would vigorously
protest under low price regimes for oil.
For example, the government can soak the rich
with all sort of taxes without the rich armed with the mandate to
respond. They have been cheating on their tax payments from time
immemorial. Placing the burden on them now would even be a great
policy equalizer. For long, the withholding taxes of the poor and
the collections from the large taxpayers division (which are the
business people) have been the major sources of government revenue.
Now it is time for the rich to shoulder the responsibility that they
have managed to dodge for years.
Some of the corporations enjoying tax breaks and
state-granted incentives should be stripped of their incentives and
made to pay the required taxes. Some supposedly pioneering
industries are not really pioneering. Some industries that are
granted tax breaks due to the nature of their businesses and their
locations have to be off the protected list.
The entire incentive system should be reviewed
and reformed.
What about government corporations? Too many
have been pampered for so long. Why can’t the government force
them to earn and give something back to government?
Reduced subsidies to these state-owned and
state-controlled laggards would mean bigger money for development
projects and less pressure on the part of the revenue agencies.
Government entities that collect fees and
charges owe the national treasury billions upon billions in
collections that they have yet to remit. The treasury should collect
now.
The government can easily suspend the 12-percent
EVAT on oil products without upsetting the equilibrium of the fiscal
system. The revenue adjustments that can be undertaken to fill up
the loss can fill up an entire restaurant menu, all of which are
palatable.
As follow up, the question that we may have to
ask is related to the intransigence of government. Why is it
resisting the call for the EVAT suspension when it is the right and
logical thing to do?
The only reason is Philippine politics and its
partisan bent. In such environment, the government often decides in
favor of policies that are surreal and murky, hard to explain and
harder to comprehend.
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