Brinkmanship

Government officials like Department of Trade and Industry (DTI) Secretary Peter Favila should stop giving false hopes to the public by saying there will be "negligible," if not very minimal, impact on the prices of basic goods and services once the expanded value added tax (EVAT) Law or Republic Act 9337, finally takes effect.

It’s plain wishful thinking, to say the least, that the price impact of the EVAT Law would not be that much when we, consumers, have already been reeling from the backlash of inflation due to the oil price crisis.

This is even while the effectivity of the EVAT Law has been temporarily put on hold since July 2 when the Supreme Court (SC) issued an injunction.

Just over the weekend, the "big three" oil firms, namely, Shell, Caltex and Petron, raised anew the pump prices of gasoline and LPG (liquified petroleum gas) by another 50 centavos per liter. The latest gasoline price hike came barely one week after the most recent adjustment.

I can just imagine how high gasoline prices will shoot up with the legality of the EVAT Law upheld by the SC in a unanimous ruling last Thursday.

The effectivity of RA 9337 is delayed though for another 15 days to give way for any appeal or motion for reconsideration that anti-EVAT petitioners might file.

Once the SC lifts its temporary restraining order on the government’s implementation of the EVAT Law, the ten percent EVAT will immediately kick in, possibly taking effect by the end of this month, unless the High Court issues new ruling.

The enforcement of EVAT will definitely jack up the prices of gasoline products and electricity, doctor’s fees and other professional services which were all previously exempted from VAT payments.

EVAT is a consumption tax directly charged and paid for by taxpayers and it does not do any good for the DTI Secretary to give such public assurances of "negligible" impact on the prices of goods and services.

As she has done in the past when she pushed Congress to approve this bill into law, President Arroyo declared her determination to stake all her political capital to see the EVAT implemented among the fiscal reforms she wants instituted.

The political capital though of President Arroyo is almost running nil with the jueteng payola and wiretapping scandals that led to the current impeachment proceedings initiated against her in Congress.

But the President is happy that this not the case for government coffers. If we are to believe official announcements of the Finance Department on revenue collections as of August this year, they surpassed revenue targets.

President Arroyo went on air last Friday night over government-owned NBN Channel 4, joined by her economic advisers led by Finance Secretary Margarito Teves, and announced the "good news" of P10.5 billion over the target revenue collections by both the Bureau of Internal Revenue and the Customs Bureau.

Mrs.Arroyo made the unscheduled presidential TV appearance in an apparent bid to credit to her political capital the positive revenue performance of the government.

The Arroyo administration has gone into brinkmanship to buoy up and salvage what remains from the President’s political capital to help her survive this latest crisis in her leadership of the country.

There have been persistent talk of Palace releases of pork-barrel allocations to House solons supposedly to kill the impeachment case. Both the opposition and pro-administration Congressmen themselves derisively ask each other "What is the price of truth?" This was before and after the House committee on justice killed last week all three impeachment complaints against President Arroyo.

The impeachment battle resumes in Congress today. Can we ask our honorable men and women of Congress to do something more productive for the people to undo the possible harm that the EVAT Law may inflict on us during these difficult times of rising gasoline prices?

In particular, we can only wish that the solons act with dispatch on a deferment of EVAT for oil products as proposed by Sen.Mar Roxas III and Rep.Joey Salceda (Lakas, Albay).

The two lawmakers are co-authors of a proposed Joint Concurrent Resolution as a speedier mode to defer the effectivity of Section 17 of RA 9337 on the lifting of EVAT exemption on the power and energy sector at least until June, 2006.

The proposed Joint Concurrent Resolution has the force and effect of a law if approved by Congress and if not vetoed by the President. The Finance Department though is bucking this proposal as this would mean some P6 to P10 billion in foregone revenues from these tax sources.

Is the President ready to again stake her political capital to remain in office through popular clamor to defer the EVAT on power and energy?

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Speaking of Congress, both chambers are set to go on recess this Sept.10 while President Arroyo is scheduled to go on her official trips to Saudi Arabia on an oil mission and to New York for the United Nations General Assembly on Sept.14.

Based on their legislative calendar, Congress will just have a one-week recess and will resume sessions starting this Sept.19 until Dec.16 to break for the Christmas holidays. Lawmakers return to Congress, after their Yule recess, on Jan.16.

By the way, our Starweek editor Doreen Yu called my attention to my previous column on the holiday calendar that Eidul Fitr, one of the regular nationwide non-working days, falls this Nov.3 (Thursday). This Islamic holiday is movable depending on the position of the moon.

Under Proclamation 839 issued by President Arroyo, she declared Oct.31 (Monday) as a special non-working day. This is because Oct.31 is sandwiched by Oct.30 (Sunday) and All Saints Day in Nov.1(Tuesday) which is an official holiday.

In which case, the Islamic holiday will thus sandwich Nov.2 (Wednesday) which is also observed in the country as All Souls Day (not an official holiday though). And if Eidul Fitr holiday falls on a Thursday, the next day, Friday is also sandwiched by Saturday which is usually a non-working day for government offices and most of those in the private sector.

By Doreen’s count of the holidays – she is now preparing this early her possible plans holiday travels – her holiday calendar starts Oct.29 (Saturday) until Nov.6 (Sunday). That is, if all the sandwiched dates are declared non-working special days. But don’t count on it yet.

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