Sunday, May 15, 2005

NR0511:GMA has no right to order VAT increase

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release May 11, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

GMA has no constitutional right to impose VAT rate hike - Rep. Beltran

Anakpawis Representative Crispin Beltran said that President Gloria Macapagal-Arroyo has no right to increase the value-added tax or VAT rate. He stressed that the power to impose taxes is beyond the power of the executive. He questioned the provision on the bicameral report on taxes granting the president powers to increase VAT rate from 10 to 12 percent.

"Malacanang has no right to make preconditions, and the pro-VAT senators in the bicameral committee have no right to give power to the president to increase VAT rate. Since President Arroyo was catapulted into power, the country's annual budget deficit estimates to about P200 billion which is already more than 30% of the country's GDP in 2004", said Beltran.

Beltran noted that the two preconditions set by the bicameral committee to give that particular extra power to the president are: 1.) Value-added tax collection as a percentage of gross domestic product (GDP) of the previous year exceeds 2.8 percent, and 2.) National government deficit as a percentage of GDP of the previous year exceeds 1.5 %."It seems that the bicameral committee doesn't impose a precondition at all. Annual budget deficit due to mismanagement and rampant graft and corruption already exceeds 1.5% of the GDP," Beltran said.

Beltran predicted that the President will impose the VAT rate hike on the date scheduled by the bicameral committee if the said report will be ratified today in the House of Representatives.

"Surely, this will result to escalation in the prices of basic commodities including power rates since the no passed on provision for VAT rate for the power generation companies were removed by the bicameral committee in the original versions of both Houses of Congress", Beltran ended.#


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