Philippines: Bayan calls on lawmakers to cross party lines in removing VAT on oil

Jan. 13, 2008

Arroyo veto will cause serious political backlash

As more senators echo the people’s demand to scrap the 12 percent value added tax (VAT) on oil, umbrella group Bagong Alyansang Makabayan (Bayan) challenged Congress to cross party lines and rush a bill that would lift the regressive tax on petroleum products. Congress is expected to resume its regular session on January 28.

The group said it welcomes the statements made by several senators as well as congressmen condemning the “tokenism” and “insult” of Gloria Arroyo’s one percentage point cut in oil tariffs and re-affirming the people’s legitimate call to scrap the VAT on oil.

But Bayan also pointed out that these statements must be immediately translated into a concrete measure such as a law amending Republic Act 9337 or the Reformed Value Added Tax (RVAT) Law that will benefit the people in the light of increasing oil prices. The group added that legislators must also exert efforts to repeal Republic Act 8479 or the Oil Deregulation Law to prevent oil firms from exploiting the public with exorbitant petroleum prices.

Bayan noted that several bills have already been filed in both Houses of Congress and all that is needed to do is to rush their approval. The group said that such measures will surely get a wide public support.

“If Congress passes this measure, it may yet be a hero to the heel in Malacanang. Both the House Speaker and the Senate President can help fast-track the approval of these important measures that will give relief to the consumers. We hope they won’t pass up this opportunity to do the nation some good,” said Bayan secretary general Renato M. Reyes, Jr.

Arroyo is expected to exercise her veto powers if an amendment to the VAT law is passed, with the government computing P56 billion in lost revenues. Bayan however warned that doing so would cause serious political backlash that will further rattle the unpopular and increasingly isolated regime.

“If Congress passes the measure and Arroyo insists on being the spoiler, she would be at the receiving end of widespread protests and public outrage. It would be politically costly. She should consider that in her computations,” Reyes said.

Even as Bayan appeals for congressional support for the removal of the VAT on oil, protests actions are already being readied to coincide with the government’s planned energy summit at the end of the month.

Bayan said that the deregulation policy must be replaced with a system of centralized procurement of imported oil; establishment of a buffer fund; renationalization of Petron and active state involvement in the market; and strict regulation of price adjustments through public hearings, among others. (END)

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