obscenely oppressive, that’s VAT!

20 July 2008

it’s obscene that the arroyo government is gleefully rolling in cash when everyone else is not, lalo na’t the source of all that cash is the onerous VAT that we the people are paying in addition to the spiralling death-defying prices of basic necessities. no wonder sadsad ang approval rating niya sa latest sws survey.

For the first time, gross dissatisfaction is at majority levels in all study areas: 63% in Metro Manila, 60% in the Balance of Luzon, 56% in the Visayas, and 62% in Mindanao,” it said.

ang reaction ng palasyo, okay lang because she is doing what’s right, never mind what’s popular, which is a lot of crap.

what exactly is she doing right ba? is it right not to scrap VAT on fuel and electricity because in her estimation it would benefit only the rich who consume the most fuel and electricity? i say it’s wrong and it’s heartless. the rich make up only 10 percent at most of the consuming population, and they have surplus money (kaya sila tinawag na rich), so paying VAT doesn’t hurt them as much as it hurts the 90 percent, the masses of poor and middle-class who could barely make ends meet before the surge in oil prices and who are now growing more anxious and agitated and angry by the day.

if gma were truly smart, and brave, and she wants her ratings to rise, what she should do is get really progressive and find another way of taxing only the rich.

as for the excuse that without the VAT collections gma would not have funds for social services and development projects, ang masasabi ko lang ay: what social services? what development projects? kung meron man, mangilan-ngilan, purely for show. i actually stopped believing that the arroyo government has any sense of public service since learning that most public schools in metro manila have no toilets and running water for our teachers and our children, susmaryosep, how terrible and despicable, how mean and barbaric a state of affairs!

i don’t care either if scrapping VAT means kukulangin si gma ng pambayad sa ating mga utang. kulang kung kulang. better yet, moratorium muna, until better times, as marck ronald rimorin suggests sa filipino voices given the global financial, food, and energy crisis.

Arbet Bernardo of AWBHoldings.com asks…, “Should we do an Argentina?” I would rather see things in terms of context. While it would be a great – no, terrific – idea if we give global financial lending institutions the middle finger and say we’re not paying for debts we never benefited from as a nation, there is still prudence in honoring our debts, just not now when we cannot afford to do so. The premise is rather simple: if you can’t afford to pay an outstanding debt, you should only pay it when you are financially capable of doing so. We can’t undo that crucial financial mistake made by former President Cory Aquino, but what we can do is to respectfully renege on the promise of “honor all debts” until such time that we can pay debt without feeling anything drastic or dramatic…..

My…recommendation would be to reallocate our financial resources, not pay debt for now, and redirect debt servicing to subsidize the people’s cost of living. From there, we could think of other solutions that go beyond Presidential recommendations for a family to eat camote and have a viand of munggo at dilis while everyone asks what’s really up with ‘borjer’ served somewhere in Greenhills.”

outof the mouth of babes. sounds good to me.

the downside, of course, is, if we scrap VAT and stop paying debts for now, wala rin daw magpapautang sa atin for now. but maybe that’s not such a bad thing – maybe then we’ll learn to live within our means for a change. maybe then we’ll be forced to buckle down, start looking out for each other, and get our act together as a truly independent and sovereign nation.

Posted in debt, VAT

16 Responses to obscenely oppressive, that’s VAT!

  1. July 20, 2008 at 3:06 am

    The Vattttmoman wants people to depend on her dole-outs.

  2. July 20, 2008 at 10:14 am

    Balashubasism eh? smart, real smart. that’ll give foreign investors a nice warm feeling about the philippines won’t it? how tough we are…how consistent?

  3. July 20, 2008 at 2:39 pm

    balashubasism? well, mga balushubas din naman sila ‘no…. so whats YOUR solution, djb?

  4. July 20, 2008 at 3:45 pm

    I can understand Cielito Habito’s logic on the progressive nature of e-VAT,

    http://business.inquirer.net/money/columns/view/20080713-148224/Will-cutting-taxes-help-the-poor

    …but i can also appreciate the validity of your line of reasoning above.

    Habito argues that e-VAT, because it taxes consumption, is actually a progressive tax, while you counter that e-VAT is that the poor cannot afford the additional hardship of such a tax and that there are other sources of funds for social work anyway (such as the debt service payments).

    I think therefore, we should leave VAT as it is and what should be reduced instead is the withholding tax on salaries down to 12% (same rate as E-VAT). At the same time, everyone who earns an income should be taxed 12% to widen the tax base. However, we should also give every adult of working age (18 to 65) both employed and unemployed (negative income tax) i.e. 500 pesos per month worth of ‘food and energy vouchers’ (not cash) which is not automatically deducted, but which the salaried taxpayer can choose to avail of, or donate.

    If the current budget is not enough to fund the above tax reconfiguration (i.e. it will result in a net loss of government revenue), then we reduce our debt service payments by the same amount to fund the same.

    I believe the above should be implemented as a package so as to preserve the ‘give and take’ nature of the social contract. It goes without saying that the above proposal would only work if we have a legitimate government that does not engage in predatory corruption so the first order of the day (as it has been ever since) is to remove the present adminisration.

  5. July 20, 2008 at 5:48 pm

    Mga Kababayan (My Countrymen):

    This will be my second to the last State Of The Nation Address before my term legally ends in 2010.

    I have 710 days left in office.

    Help me be a good president during the remainder of my term.
    Gloria Pidal
    The VATWoman

  6. July 20, 2008 at 5:55 pm

    salamat, cvj ;) it’s good to know from you that my line of reasoning is valid… oo nabasa ko rin si ciel habito who unfortunately had no concrete suggestions to offer. yours sounds good, too, more like bush’s subsidies na for all classes, rich and poor. plus tax reconfiguration, hmm. AND the possiblity of reducing debt service payments. why not, indeed. but yes first gloria has to come to her senses. then, maybe, she can get creative.

  7. July 20, 2008 at 6:43 pm

    and then, again, on 2nd thought, parang mas simple kung i-scrap na lang ang VAT. mas mararamdaman agad pati ng taongbayan. the benefits would be psychological, too. for once pinakinggan sila, inuna sila.

  8. July 20, 2008 at 8:23 pm

    Angela, thanks as well. Admittedly, it’s a tough issue especially with a government that cannot be trusted. Over at Ellen Tordesillas, commenter Tounge suggested that to turn the VAT on oil into a hybrid VAT/specific tax:

    http://www.ellentordesillas.com/?p=2612#comment-581810

    “The specific tax on oil should have been “12% VAT OR $6 (or $7 or $8) per barrel, whichever is lower”.

  9. July 20, 2008 at 9:16 pm

    When it comes to dealing with those less privileged, Gloria’s real problem is not deception, but self-deception.

  10. July 20, 2008 at 10:03 pm

    hey equalizer ;) i think you got something there. she deceives herself that she’s doing the best that can be done for the less privileged. it’s the only way she can keep going.

  11. July 21, 2008 at 9:22 am

    Senator Chiz Escudero said politicians and political parties have their attention trained at the 2010 presidential elections and they are more comfortable that President Gloria Macapagal-Arroyo would finish her term.

    “We have already suffered and sacrificed for seven years, what is two years?” he said of Arroyo’s administration.

    To Chiz Escudero,patience is long,long,long suffering!

  12. July 22, 2008 at 2:49 pm

    ma’am angela:

    yes, my prescription is balashubasistic… if there’s such a term. kasi kung patuloy nga tayong magbabayad ng utang na di naman tayo natulungan (onerous marcos stuff, whatever the past presidents have been making loans for), i see no reason for us to honor a dishonorable debt.

  13. July 22, 2008 at 4:10 pm

    hey marck: if there’s balashubasism, there’s balashubasistic ;) when it comes to doing something about our ballooning foreign debt, some old fogeys get really ballistic, never mind that it leads to nowhere but perdition.

  14. July 26, 2008 at 4:45 pm

    The first time VAT was introduced in Cory’s time, I attended BIR’s seminar and I was seated in the front row between business leaders Augusto Santos and Sergio Ortiz-Luis who were both complaining that it it is unfair to the rich who buy all their needs with receipts. But Commissioner Ibay replied that that was the purpose, those who buy more are taxed more. In that law, however, there were some exemptions: Export sales, foreign currency-denominated sales (inwardly remitted through the banking network), and sales within the Export zones.

    I’ve not heard that foreign currency-denominated sales have been removed from zero-rated transactions. If it still holds true, then we should buy using credit cards and pay later with our banks in dollars, euros, yens or whathaveyou and be exempt from VAT.

  15. July 26, 2008 at 5:14 pm

    Well, I checked with the BIR site and I’m correct, foreign currency-denominated sales are zero-rated.

    I have an idea, why don’t we start a store that charges in dollars and cents. We actually sell 12% cheaper than any competitor. With millions of OFW-dependent prospective clients, we’ll strike rich!

  16. July 26, 2008 at 7:35 pm

    hey tongue, oo nga! sali ako dyan ;) … and may i also import another comment of yours kay ellen: “Hindi lang VAT ang naka-tongpats sa langis, may import duties pa na sinisingil ang Customs. Kahit pa 5% lang ang sinisingil na duty, $7 per barrel pa rin iyan. Malaki na ang kinikita ng gobyerno sa langis kahit walang VAT, siyempre pa, may income tax na sinisingil pa mula sa mga oil companies pati pa yung sa gasoline stations.

    “Kaya naman gustong-gusto ng pekeng ekonomista ang VAT dahil ito ay consumption-based. Dahil walang gaanong income tax sa kawalan ng investors, gumugulong ang ekonomiya sa OFW remittances na personal comsumption lang ang pinupuntahan. At dahil nga pass-on ang VAT, ang kawawang consumer ang sumasalo ng buong-buo nito dahil hindi naman niya maipapasa ang VAT.

    “Kung ang VAT sana ay naibabawas sa income tax ng bawat manggagawa, gaya ng ginagawa ng mga negosyante, walang duda na mas makakabuti ito sa tao. Kaso, kahit sari-sari store, hindi maka-credit ng input VAT sa kanyang taxable income, kaya maging ang underground economy na siyang bumubuhay sa maraming hindi makakuha ng trabaho sa kakarampot na job openings ay dagdag pa sa pahirap sa masa at dagdag pa sa taas ng presyo.

    “Inutil ang pekeng ekonomistang si Gloria. Ang Economics, gaya ng itinuturo sa Econ101, ay proper allocation of resources. Ibig sabihin, palabas ang pera. Si Gloria, puro pakabig ang iniintindi – ganyan talaga pag gahaman.”

    mismo! gahaman, ganid, garapal, garapata!

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