Thursday, February 02, 2006

E-VAT: A bane, not a boom, to the nation

From the Office of Anakpawis Representative Crispin B. Beltran
Reference: Rep. Crispin Beltran (+63)927.871.1080
Lisa C. Ito, Public Information Officer (+63)927.796.7006
Tel. # (+632) 931-6615 Email:

February 1, 2006

E-VAT: A bane, not a boom, to the nation
Rep. Crispin B. Beltran
Anakpawis Party List

Today we are already reeling in shock from the economic whammy brought about
by the Expanded Value Added Tax's (E-VAT) full implementation from 10% to
12% starting nine hours ago.

Early morning reports have monitored a flurry of oil, power, and fare
increases since the stroke of midnight: from average diesel and gasoline
price hikes of 60 to 70 centavos a liter and power rates in the franchise
area of Manila Electric Co. by an average of 10 centavos per kilowatt-hour.

This will soon build up into a crescendo of hardship and outrage from the
toiling masses who will be the primary targets and victims of this
abominable piece of taxation. Right at this very moment, Filipino consumers
everywhere are up in rage against the EVAT: pockets of protest actions in
marketplaces around the nation this morning will soon escalate into rallies
by noon and in the coming days of unrest.

Meanwhile, the Palace, Department of Trade and Industry, and Mrs. Arroyo's
allies in Congress remain an isolated chorus in the wilderness in their
unbelievable claims that the EVAT's effects will be minimal, temporary, and
necessary for the long-term survival of the nation.

A heavy cross on the shoulders of the suffering poor
Due to the Supreme Court declaration of the Arroyo-promoted E-VAT as legal,
prices of almost all rates, prices, and services have increased to appalling
and alarming levels, especially since service providers and manufacturers
are expected to pass on the end costs of this tax to consumers. Since the
start of the EVAT's implementation last year, gasoline prices have rose by
at least three pesos, and liquified petroleum gas (LPG) from P482 to more
than P500.
The Ecumenical Institute for Labor Education and Research (EILER) estimates
that the EVAT will only increase the disparity between the incomes of
ordinary Filipinos and the prices of basic commodities and services, adding
at least P600 to P900 in a family's monthly expenditures.
Where on earth does the Palace expect ordinary workers and farmers to get
the additional income to shoulder the EVAT-related increases? Especially
now, when the measly minimum wage of P275 a day for private workers alone
can not even meet the estimated P681 daily cost of living for a family of
six in the National Capital Region. The minimum wage stands at a national
average of only P222.93 daily as of last June, or P444.27 less than the
P667.20 national average family living wage for a family of six.
Even the Palace's much-publicized call for P13.1B, or around P1,000 a year
alleviation allowances for government workers is barely enough to cover the
EVAT-related increases. It's a no-win situation really for our peasants and
workers, whether they be in the private or public spheres

A bitter pill that will kill the patient as well

Why is this government bent on ramming EVAT through our throats at a time
when 4.1 million Filipinos are suffering from severe hunger?

The people are infuriated over the fact that the Expanded Value Added Tax
will drain more out of the poor than it promises to give. While the Palace
estimates that the government can collect around P35.12 billion in revenue
collections from EVAT last year, and quadruple that amount in 2006, this is
just peanuts to the P81.4 billion that the Filipino poor will be shelling
out from their gross incomes to pay for the VAT-related increases and from
the long-term qualitative effects of this tax on their lives.

The EVAT is an assault on the poor. The people have long been making small
but painful sacrifices―in their daily food, medicine, and operational
budgets--just to make ends meet. The Palace has the insensitivity to demand
more sacrifices and claim that the EVAT's effects will be minimal and
short-term, but does not see the long-term effects on all this scrimping on
the lives of poor Filipinos: neglect of health and nutritional needs,
incessant delays in schooling, tension-related ailments, and more despair
and tension over a moribund economy.

A symptom of misplaced government budgetary priorities

We from the progressive party list have never ceased reiterating that the
EVAT is a symptom of the Arroyo administration's flawed policies. The Palace
is flaunting that it will source its funding for the peoples' basic
investment needs, such as health, housing, and education, from the P35
billion EVAT collections. This is rather short-sighted considering that much
more revenues can be earned by decisively curbing corruption in graft-ridden
agencies which siphon off hundreds of billions of pesos a year alone; or
drastically reducing foreign debt allocations, which amount to the country's
main budgetary expenditure anyway
Conversely, this Administration has never concretely supported initiatives
to lessen the disparity between income levels and expenditures. In spite of
all the increases in the costs and expenditures of ordinary Filipino
families over the span of six years, wage levels now have never
substantially deviated nor appreciated from the wage levels of 1999. The
last two mandated wage increases were in the year 1999 and 2000. The calls
for a legislated, across-the-board and nationwide daily wage increase of
P125 for workers in the private sector and monthly salary increase of P3,000
for workers and employees in the public sector continue to be largely
ignored by major policy-makers in Congress and in the Palace despite the
overwhelming public clamor.
A formula for social unrest

Unjust taxation is a historical cause of societal revolts in the Philippines
and around the globe. This is also true for the EVAT, which is already
spawning a new wave of social unrest which the Arroyo administration
threatens to quell with force.

In a survey done by the IBON Foundation prior to the E-VAT's implementation
last November 1, 84% of the respondents rejected the E-VAT. This number is
expected to rise as the increase goes from 10 to 12 percent today.

The E-VAT is clearly a bane, not a boom, to the national economy and the
people's welfares. We reiterate our calls to finally hurl the EVAT into the
trash can. And junk the Arroyo Presidency along with it. ###


Post a Comment

<< Home