People assail VAT increase
The Arroyo regime has been frantically defending its openly antipeople scheme to raise the value-added tax or VAT from 10% to 12%. This, after reactionary representatives in congress railroaded the bill's passage despite the people's intense and widespread opposition.
This is the fourth taxation law passed by congress in just two months. The much-vaunted tax measures are expected to augment the "national treasury" that serves as a milch cow for the regime and its cohorts.
The VAT is a taxation system first implemented by the Aquino regime in 1988. It replaced the "general sales tax," ostensibly due to the latter's inutility to raise tax revenues and corruption within the Bureau of Internal Revenue. In fact, VAT was imposed to comply with conditions set by the International Monetary Fund (IMF) and World Bank (WB) for new loans. All of the subsequent amendments to the law were likewise dictates of the IMF and World Bank.
Anyone who sells, rents out, imports or provides certain services is obliged to pay the VAT. Nevertheless, it is an "indirect tax" that may be passed on to consumers, lessees or clients and is unlike the "sales tax" which is principally borne by the seller. It was expanded in 1996 to include other services.
In August 2004, the IMF came out with a list of measures to ensure the Philippines' ability to pay its debts. Not surprisingly, it included raising the VAT by 20-40%.
Although not always noticeable, VAT covers all basic products except fresh produce, and many services. The so-called "input VAT" is imposed on every process and stage in the manufacture of a product. An additional 10% "output VAT" is imposed whenever a consumer buys or pays for a service on top of the overall "input VAT" which is already part of the product or service price. Thanks to Arroyo, the "output VAT" will soon be raised to 12%.
The Arroyo regime is drooling over the anticipated P25 billion that would be generated from the higher VAT. If the exemption for fresh produce is removed, another P28 billion would be added to the "national treasury." This is in addition to the P15 billion that would be collected from liquor and cigarette (so-called sin) taxes and P10 billion from the Lateral Attrition Law.
The regime joins its imperialist masters in the IMF and World Bank in rejoicing over the country's supposed new-found ability to service its debts. Maybe now, others could be led to believe the declaration that the country has already gotten over its financial crisis. There will supposedly be a reduction in the budget deficit. The country's standing with international banks and financial institutions would become a bit more favorable. Maybe this time, banks would be amenable once more to extending credit to the bankrupt and corrupt Arroyo regime. One does not have to be a genius to figure out where this is headed.
The people can not stomach the regime's lies. The regime's spokespersons say that the people should be thankful for congress' efforts to exempt from rising prices what are considered the poor person's fare--instant noodles, sardines, tuyo (dried fish), patis (fish sauce), bagoong (fermented fish paste) and canned goods. Even if the prices of these goods do increase, according to Arroyo's cabinet, it would only be by a few centavos.
Initial estimates of progressive representatives in congress show, however, that expenses per family would grow by P256 per month as a result of the VAT increase. This, in a situation where the P300 daily wage is already extremely inadequate for a family living in Metro Manila. Even without the VAT increase, a family of six would already need P590 or P290 over and above the minimum wage to live decently. The workers' demand for a P125 increase in the daily wage and government employees' clamor for a P3,000 across-the-board hike in monthly salaries involve much smaller amounts� and yet the regime continues to reject the implementation of a just increase in wages and salaries.
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