NR0209: Malacanang allies railroading VAT exemption amendment bill

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release February 9, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Email: paggawa@edsamail.com.ph, anakpawis2003@yahoo.com
Cellphone number 09213907362
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Solon slams Malacanang allies' railroading of amendments to VAT exemption
law; says new VATable services and products will mean heavier economic burdens
for the public

Anakpawis Representative Crispin Beltran today expressed vehement condemnation
for what he termed as the House Committee on Ways and Means and the House
leadership's connivance to railroad the bill removing various products and
services from the being exempted from the value-added tax.

Beltran said that the conduct of Malacanang's allies in the House was
"appalling" and should be condemned. "House bill 3705 amending the National
Internal revenue Law, specifically its provisions on the VAT- was filed on
February 7 at the House's Bills and Index Division at 3:30 pm, but on the same
day the bill was approved at the Committee level, a committee report written
up, and the said bill was submitted for 2nd reading deliberations. San ka
nakakakita ng ganyang kagarapal na pagmamaniobra?! The bill wasn't even
included in the order of business."

The veteran labor leader said that Malacanang's allies in the House were
clearly pulling out all the s tops to have the VAT measures passed as soon as
possible. "They're not even pretending to be obeying the House rules! If this
bill is passed, it would be tantamount to committing a most heinous crime
against the Filipino people. This on top of the 12% VAT increase measure
spells disaster for all working people and the poor. But even the sectors
relatively able to cope somewhat with high prices and the new taxes will also
be grievously affected," he said.

The plan to lift VAT exemptions on several sectors will also have a further
negative impact on the poor. For example, lifting the VAT exemption on the sale
or importation of coal, natural gas and petroleum products is projected to push
power rates up by at least P0.74 per kilowatt-hour. Apart from its direct
impact on consumers' energy bills, the expected hike in power rates would also
result in increases in the prices of goods and services as the cost of
production goes up.

The effect of all these measures would be further multiplied by the P2 per liter
across-the-board hike on the specific taxes of petroleum products, which became
effective starting this January.
Shell and Caltex have already warned that the net additional costs to be cause
by the VAT they will automatically pass on to consumers.

In the meantime, Beltran said that scrapping the VAT exemption enjoyed by
medical practitioners would directly hit their patients, especially the
indigent.The Philippine Medical Association (PMA) have already stated that the
12 percent VAT on doctors would be passed on to their patients.

"If the exemption is lifted, doctors will have to pay from 10% to 15% income
tax and an additional 12% VAT. That 12% will be a passed on to patients as
consumer tax ," he said.

He said lifting the tax exemption on the medical profession would be a
"potentially lethal injection" to poor families who will face higher prices
of basic commodities if the bill increasing VAT is signed into law.

Beltran also said that the VAT increase on doctors and medical practioners would
exacerbate the exodus of doctors leaving the country to practice their
profession overseas. He said the exodus of licensed doctors would result into
a 40% decrease in the number of doctors in the country by 2010.
According to reports, at least 800 doctors have taken job offers abroad last
year, with another 1,000 to 1,500 expected to leave this year.#