Press Release
January 10, 2008

ROXAS WELCOMES EARLY HEARING ON OIL VAT SUSPENSION
SLAMS REVIVAL OF PROPOSAL TO TAX TEXT

Senator Mar Roxas welcomes the announcement of the Senate Ways and Means Committee Chairman, Senator Francis Escudero, that hearings on the proposal to suspend the 12% value-added tax on oil will be held before session resumes on January 28.

"Your legislators are ready to buckle down and work to provide relief to our people. Continuing to impose 12% VAT on oil in our time when crude is $100-a-barrel will not only further weaken the economy; it is also unjust," he said.

"The executive has shot down our proposal, but their reasons are misplaced. The President and her Secretary of Finance are sworn to follow the law, so if we change the law, they will have to follow," he stressed.

Roxas warned that the economy is in danger of stalling, as the purchasing power of the people continues to weaken due to continued oil price hikes. Consumers are getting squeezed as pump prices have more than doubled in the last 3-4 years, and OFW's incomes have diminished by P10-15 per dollar.

"By suspending VAT on oil, we are re-flating the economy and preventing an inflationary spiral. Sa madaling sabi, agad na ginhawa sa halagang P4 kada litro ng diesel o P60 kada tangke ng LPG ang epekto nito," he said.

Roxas also slammed the executive's pushing of a tax on short message service or "text" messaging as a means to make up for inadequate government collections.

"The government is rubbing salt on a wound by first rejecting a bill to suspend the VAT on oil products, and then expressing openness to tax another daily-life necessity - text messaging," he said.

"Stop tightening the noose around the already compliant taxpayers. There is still a lot of improvement to be done in abandoned sources of collection, such as big-time tax evaders and smugglers," Roxas said.

He said the government must instead work to collect taxes that are lost to corruption and other leakages. He cited estimates by the DOF itself that in 2006, P107 billion in potential income taxes were not collected because of leakages; bulk of which in corporate, business and professional income taxes.

"It all boils down to the question: is the government doing its job? We have a hard time believing so," he added.

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