Govt to lose P70B if VAT on oil, power is scrapped - Arroyo

MANILA, Philippines - The government stands to lose up to P70 billion in revenues if the value-added tax (VAT) on oil and power is lifted, President Gloria Macapagal Arroyo said Wednesday. During the launching of the “Palit Bumbilya, Katas ng VAT” program at the PICC, President Arroyo said repealing VAT on oil and power “will strip the vast majority of our people of the means to ride out the world food and energy crisis." "In our discourse on the most effective solutions to our people’s travails, we will not agree on everything... We have come too far, made many sacrifices on the hard but wiser road taken to turn around now and give up enduring strengths for popular but counter productive short term gains," she said in a speech during the launching. The President said the estimated P70 billion that will be lost in the scrapping of VAT on oil and power would affect the government’s pro-poor projects. Also, removing the VAT on oil and power would slow down the economy, President Arroyo said. "VAT boosted investor confidence in recent years. From P56.50 to $1, the peso strengthened to P40.23, before the oil and rice imports brought it back to P45.55. Imagine if without VAT, our starting point was P55," she said. President Arroyo said the government had not been deaf to the call of some sector to review its fiscal policies in light of the global problem, and that measures to cushion its impact had been adopted. She said these measures include the bringing down of tariff on oil to zero since June to help curb the pump price increases to some degree. "Sa madaing salita, dinig natin ang hinaing at panawagan ng karaniwang mamayan at tumutgon tayo gamit ang lumlagong kaban ng bayan. The global crisis did not catch us unprepared or without reserve, thanked God and thank the VAT," President Arroyo said. - GMANews.TV