Recto asks gov't to slash VAT on fuel

Senator Ralph Recto said the government should either reduce the value-added tax (VAT) on oil products or subsidize a fuel price rollback for public utility vehicles (PUVs) to help cushion the effect of recent price hikes. Recto said the government can push pump prices downward by sacrificing its revenues from the VAT imposed on oil products, noting that its VAT revenues also go up as fuel prices increase. In a statement, he said the government can also use its VAT revenues to subsidize a price rollback in diesel used by PUVs in order to ease the burden on commuters. "Diesel should be restored to its pre-Libya level to provide relief to the commuting masses and ease pressure on fare rate and prices of basic commodities," said the senator. Recto, who is also chairman of the Senate committee on ways and means, suggested that the government subsidize half of the rollback’s cost while oil firms shoulder the other half. "Would the government and oil companies be also willing to sacrifice?" he said. Senator Franklin Drilon, chairman of the Senate finance committee, said he was open to Recto's proposal but said that it would need legislation. "I am open to it... let's hear it if we want to," he said in a separate interview on Wednesday. Senate President Juan Ponce Enrile and Senate Majority Floor Leader Vicente "Tito" Sotto III were likewise open to the idea but said that the matter warrants an extensive study before being implemented. "We could have suggestions of our own which might not be possible or might not even be acceptable to the players," Sotto said on Wednesday. Senator Juan Miguel Zubiri had also earlier filed Senate Bill 2672, which seeks to restore VAT exemptions on sales of electricity, petroleum, and petroleum products. "Every peso raked in by government is an additional burden shouldered by the consumer especially in times of rising oil prices," Zubiri said in his explanatory note. In an interview on Wednesday, Zubiri said that with the said VAT exemptions, he expects consumers to save as much as P1 per kilowatt hour due to lower power rates and P5 to P6 per liter due to lower fuel prices. During Recto’s earlier senatorial stint, he was a co-author of the controversial expanded VAT. His role was later repeatedly criticized by political opponents as well as the transport sector. (See: Recto defends EVAT in Osmeña country) On the other hand, when Recto was Socioeconomic Planning secretary under then President Gloria Macapagal-Arroyo, he had repeatedly alleged that oil firms were overpricing their products, even clashing several times with the late Angelo Reyes, then Energy secretary, over oil pricing policy. Reyes, who was himself being criticized as an apologist of the oil firms, slammed Recto's position as mere grandstanding. (See: DOE chief defends oil price hikes, hits Recto for grandstanding)—Kimberly Jane T. Tan/JV, GMA News