The Pangasinan Star ONLINE

THE PEN SPEAKS
Danny O. Sagun

“VAT ba sila matatakot?” That title of a komiks-type pamphlet struck my attention when a copy was handed to me during a Consumernet meeting at the Department of Trade and Industry provincial office recently. Indeed, is the expanded value-added tax (EVAT) as scary as depicted in the front cover and page 2 of that eight-page reading material?

Under Republic Act 9337, the VAT as a tax measure was reformed to now include certain products and services like petroleum products and electricity which were exempted before. EVAT was especially passed to augment government’s revenues. Collections from EVAT are to be earmarked for public services like education, agriculture, environment protection and health insurance.

We may be surprised to know that for every P1 collection by the government, 90 centavos go to debt servicing and only 10 centavos go to public services and infrastructure. This is the main reason government badly needs money to fund its programs and projects. It cannot always rely on loans from foreign and domestic sources as has been the practice of previous administrations for the past decades.

Will fares in public utility vehicles increase? A little, because of the 10 percent VAT on petroleum products. It is a fact however that oil prices in the world market are unstable and tend to go up suddenly To soften the impact of VAT on oil products, taxes on excise and tariff were reduced so that the projected increase in oil products would range from two to eight percent only, not 10 percent.

How about goods and products sold in the market? There is no VAT on fresh foods, rice, and house rent of less P10,000 a month as well as low-cost housing, tuition fees and books. No VAT is imposed on small enterprises which have less than P1.5 million income in a year like sari-sari stores, carinderia and market stalls.

Will VAT really help the country. Yes. Along with VAT are financial reforms and austerity measures, and the campaign against tax cheats. VAT is a consumption tax, meaning, those who consume more will just have to pay more.

“Medyo mabigat, pero talagang kailangan pala ang VAT. Dahil mas laong nakakatakot kung wala tayong gagawin,” said the primer-cum-comics.

Who wants to pay more in taxes anyway?

But as we were taught in school, taxes are the lifeblood of a nation. We are not as rich as Brunei so we cannot do anything but share the burden with government and give to Caesar what is due Caesar. We do hope however that the taxes from our hard earned money go to where they are intended, not to the pockets of a thieving few.