Backing proposals for the immediate removal of the 12% Value Added Tax (VAT) for petroleum products, Gabriela Women’s Party Representative Liza Largoza Maza belied claims by Malacanang that VAT revenues from oil shall be allocated for health services.
“This government spin to defend its VAT collection on oil products in the midst of rising oil prices is baseless. The finance department has long admitted in committee hearings in Congress that no mechanism has been set in place to segregate sources of VAT collections, more so the segregation of its allocation. There are no guarantees that VAT collections from oil will be allocated for health services. Malacanang should stop holding basic services like health as a hostage to get people to back off from demands of reducing oil prices by removing the 12% VAT,” said Maza.
According to Maza government claims of estimated revenue losses of Php52 Billion shoud the 12% VAT on oil be removed can easily be addressed by addressing graft and corruption in tax collections.
Maza cited statistics from the IBON Foundation and the National Tax Research Center which estimate that graft and corruption in revenue collections have cost government Php82 Billion in uncollected corporate taxes in 2006 and an average of Php57 Billion annually in uncollected VAT.
The GABRIELA solon further said the Arroyo government’s refusal to implement measures to cushion the impact of rising oil prices on the public by removing or even suspending the VAT is a clear betrayal of its priorities. “While the government can easily do away with tariffs, to ensure profits for big oil companies, it refuses to do away with VAT collections– a move that will definitely give commuters and ordinary consumers a respite from the oil price increases.”
It is estimated that once the 12% VAT on oil is removed, pump prices would go down by Php4.00 per liter and Liquefied Petroleum Gas by at least Php60.00 for every 11-kg cylinder tank. #