House to Senate: Pass VAT soon

Members of the House committee on ways and means urged their counterparts in the Senate yesterday to sustain the current economic uptrend by immediately passing the proposed bill increasing the value added tax (VAT) rate from 10 to 12 percent.

Leaders of urban poor groups also expressed support for the VAT hike bill so long as legislators exempt certain food items from the increase.

Reps. Exequiel Javier of Antique and Monico Puentevella of Bacolod City expressed confidence Senate President Franklin Drilon will be able to muster enough support for the bill, which opposition lawmakers rejected for being anti-poor.

"With the peso and stock market now getting stronger, lawmakers should not miss the chance to foster an economic boom by supporting it with necessary reform and tax measures like the VAT hike proposal," they said in a joint statement.

Javier, vice chairman of the House committee on ways and means, said their counterparts in the Senate "should complement the hard work" they have shown in immediately passing House Bill 3555 last Thursday. They have done the same with two other tax measures that President Arroyo earlier signed into law.

"The House has been on track with its fiscal agenda because it has strictly followed its legislative calendar for the committee hearings and plenary debates on the key administration reform and revenue proposals," he said.

Javier explained congressmen "have seen the urgency of passing these measures and their importance in our economic survival." He noted that in case of disagreements between the House and the Senate on the VAT hike measure, these may still be settled once the bicameral conference committee tackles the bill.

"We have seen statesmanship among senators and congressmen during the bicameral conference on the sin tax and lateral attrition bills. We are confident this sense of statesmanship will again prevail in the VAT bicameral meetings," he said.

Puentevella, a member of the House ways and means committee, said lawmakers need to "sustain the momentum of passing urgent reform bills, including the VAT bill, as efforts of members of Congress have helped boost investor confidence in the country, which has been reflected in the stronger peso and bullish stock market."

Leaders of urban poor groups called on De Venecia and Drilon to spearhead a pro-VAT coalition so the voice of the urban poor may be heard.

Masa Bansa vice president Fortin Yabut said they support the government’s move to increase VAT rates so it can maintain its services to the poor. He said his group is willing to provide the Senate with a shortlist of commodities they strongly feel should be exempt from the VAT increase. Included in this list are noodles, sardines, infant formula, rice, sugar and bread, particularly pandesal.

Sally Dagami, a women’s sector leader of the Kaisahan ng Mamamayan Para sa Bayan (Kaisambayan), said they are willing to back the VAT hike bill as long as the revenues it will raise are allotted to pro-poor programs, especially on education and health.

Kaisambayan also called on lawmakers, including those representing militant party-list groups, to demonstrate their willingness to "swallow the bitter pill" for national growth by giving up their pork barrel funds.

"This will greatly improve the government’s fiscal position without unduly burdening the poor," Kaisambayan leader Mila Suarez said.

Close Watch

Malacañang vowed yesterday to keep a close watch on the congressional deliberations on the proposed VAT hike bill to ensure that lawmakers include "safety net" provisions to mitigate the impact of the tax hike on the prices of basic goods and services.

Presidential Spokesman Ignacio Bunye said the House-approved VAT bill did not include the proposed exemptions for processed foods such as noodles, sardines and bread that the President and Congress leaders agreed to insert in the measure.

He said the House version will still go to the Senate and be subjected to further fine-tuning by senators. Once the Senate approves its own version of the VAT bill, the two chambers will convene a bicameral conference committee to consolidate the two versions of the bill.

Bunye shrugged off reported threats by some pro-administration senators, such as Sen. Joker Arroyo, to block the passage of the VAT bill.

"We have faith in our senators that they concur with the objective... of putting our fiscal house in order. And if there is any disagreement, this is disagreement on details, not on principles," he said.

Bunye stressed that the expression of these senators’ opinions "is part of our democracy. But... overall, once there is deliberation on (the VAT bill), we believe majority of the senators will more or less adopt this (fiscal reform) program being pushed by the President."

He again sought to assure the public yesterday that Mrs. Arroyo and her economic managers will continue to find ways to lessen the impact of the VAT hike.

Bunye said while there would indeed be a consequent increase in the prices of basic goods and services subject to VAT once the higher rate is enforced, but "our mass consumers... will be afforded the maximum protection."

"Those who can afford will have to pay a little more. Safety nets will be put in place for our socially sensitive sectors," he said.

In an official statement, Bunye appealed to those opposed to the VAT bill to refrain from claiming the measure would further impoverish poor families.

"We welcome rational debates on the issue at every level of society but let this not be overcome by rabble rousing and hate campaigns," he said.

Bunye vowed that the government will temper the increased VAT’s "slight effect" on socially sensitive products by conducting a vigilant price watch and measures to ensure a stable supply of basic commodities.

The VAT bill is one of eight measures the President endorsed to Congress last year to raise about P80 billion in additional revenue for the cash-strapped government.

"The tax measures we are pushing are the best and the only option to spare the country from severe economic instability, and the people from abject poverty," Bunye said.

He called on the public to "not whip up irrational fears but dwell instead on the positive results of our improving fiscal situation, especially the steady upsurge of the economy that is the harbinger of more jobs and livelihood opportunities for our people."

The VAT hike bill is projected to raise P50.17 billion in additional revenue.

‘No Way’

On the other hand, two opposition senators said the VAT bill is unlikely to be approved by the Senate.

Sen. Juan Ponce Enrile said 13 of the 23 senators from the opposition and administration will vote against the bill. He said he and eight other opposition senators — Senate Minority Leader Aquilino Pimentel Jr., Edgardo Angara, Panfilo Lacson, Sergio Osmeña III, Jinggoy Estrada, Luisa Ejercito, Alfredo Lim and Jamby Madrigal — as well as re-electionists Francis Pangilinan, Ralph Recto, Manuel Villar and Arroyo are expected to junk the VAT measure.

He added that even "independent-minded" administration senators Miriam Defensor-Santiago, Rodolfo Biazon, Juan Flavier, Ramon Revilla Jr. and Manuel Roxas II may also oppose the bill.

Pimentel suggested that the VAT exemption of independent power producers, telecommunications companies and profitable cooperatives should be lifted to widen the tax base.

He also expressed reservations on the move to lift the VAT exemption on the sale and importation of petroleum products, saying this will affect producers and distributors of farm products and other basic goods and cause them to jack up their prices. — With Katherine Andraneda, Jose Rodel Clapano