Gov. Imee Mar­cos: One-year VAT sus­pen­sion is bet­ter than moves to de­fer 2nd tranche of ex­cise taxes

Sun.Star Cagayan de Oro - - Nation -

Ilo­cos Norte Gov. Imee Mar­cos said sus­pend­ing the Value Added Tax on ba­sic com­modi­ties – in­clud­ing food, fuel and elec­tric­ity – for one year will ben­e­fit a wider num­ber of Filipinos at a faster pace in­stead of wait­ing for the sus­pen­sion of the sec­ond tranche of ex­cise taxes next year.

“The sus­pen­sion of the VAT would pro­vide im­me­di­ate re­lief to Filipino con­sumers. Given the mag­ni­tude of pre­vail­ing tax rates, the tem­po­rary sus­pen­sion of the VAT on ba­sic ne­ces­si­ties would be im­me­di­ately felt by mil­lions of Filipino fam­i­lies,” Mar­cos stressed.

“Sus­pend­ing the VAT on ba­sic food items, fuel and elec­tric­ity will di­rectly coun­ter­act the strong in­fla­tion pres­sures on these goods,” she said.

Mar­cos, who is run­ning for sen­a­tor in next year’s midterm elec­tions, noted how Ilo­cos and Davao re­gions were hard­est hit by re­cent in­fla­tion­ary pres­sures.

“My prov­ince has one of the high­est in­fla­tion lev­els in the coun­try and my province­mates are re­ally strug­gling to make ends meet. We need im­me­di­ate and mean­ing­ful re­lief from the na­tional gov­ern­ment,” Mar­cos said.

Ac­cord­ing to the De­part­ment of Fi­nance, ba­sic food items such as rice, fish, meat and veg­eta­bles have been ma­jor driv­ers of in­fla­tion this year, with the con­tri­bu­tion of rice alone ris­ing 10 times to 1 per­cent­age point of the in­fla­tion rate.

Data from the Philip­pine Statis­tics Agency showed that rice was the num­ber one con­trib­u­tor to in­fla­tion in Septem­ber 2018, and that food items in the con­sump­tion bas­ket ac­counted for more than half of the in­fla­tion rate in the same month.

While VAT rev­enues ac­counted for a fifth of over­all tax rev­enues, amount­ing to ap­prox­i­mately P365 bil­lion, Mar­cos said the na­tional gov­ern­ment has the ca­pac­ity to ab­sorb the VAT rev­enue loss given the ris­ing tax rev­enues with the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion Law.

“While col­lec­tion ef­fi­ciency has im­proved, there are still ar­eas for im­prove­ment, and thus taxes to be col­lected. If, for ex­am­ple, in­come tax col­lec­tion grows by at least 10 per­cent, the gov­ern­ment is poised to earn P102 bil­lion in 2018 and P113 bil­lion in 2019,” the gover­nor said.

“That 10 per­cent growth rate in tax col­lec­tions is even an un­der­es­ti­mate given that our eco­nomic growth re­mains strong amid high in­fla­tion and the 2019 mid-term elec­tions will spur eco­nomic ac­tiv­ity,” she added.

TRAIN Law ex­cise taxes will con­trib­ute P85 bil­lion while run­ning af­ter tax evaders more vig­i­lantly could add an­other P25 bil­lion to com­pen­sate for the po­ten­tial rev­enue loss if VAT is sus­pended.

Mar­cos said gov­ern­ment agen­cies must also in­crease their ab­sorp­tive ca­pac­ity, cit­ing the pro­jected P140 bil­lion spend­ing deficit for the whole year. She also pushed for the abo­li­tion of the Na­tional Food Au­thor­ity, which would add an­other P7 bil­lion.

“These mea­sures alone will re­sult in P362 bil­lion in rev­enues, enough to com­pen­sate for the po­ten­tial VAT rev­enue loss,” she pointed out.

“Since VAT rev­enues can be cov­ered by these mea­sures, the num­bers in­di­cate strong ev­i­dence to jus­tify the sus­pen­sion of VAT,” said Mar­cos, who also served as law­maker in the House of Rep­re­sen­ta­tives rep­re­sent­ing Sec­ond District of Ilo­cos Norte from 1998 to 2007.

Mar­cos said she was prompted to strongly ad­vo­cate for the sus­pen­sion of VAT af­ter she per­son­ally ob­served the de­bil­i­tat­ing im­pact of the sky­rock­et­ing in­fla­tion to her con­stituents and other Filipinos in the coun­try­side.

“It is re­ally de­press­ing that Filipinos liv­ing far from highly ur­ban­ized ar­eas are suf­fer­ing the brunt of in­fla­tion, which could have been read­ily ad­dressed by im­me­di­ately sus­pend­ing the VAT for one year,” the Ilo­cos Norte gover­nor lamented.

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