PNoy: Slashing VAT will not serve to cushion against higher oil prices

(Updated: 4:14 p.m.) The President on Monday turned down proposals to slash by half the 12-percent value-added tax (VAT), explaining that the move would merely bring down government revenues and not directly benefit the public. In a chance interview at the Palace, President Benigno Simeon Aquino III said that a cut in VAT, in fact, could lead to a higher consumption and later a higher demand for fuel, jacking up oil prices. “Pag binawasan natin ‘yan, magandang pakinggan (If we reduce it, sounds good)," Aquino said. “Pero at the end of the day, mukhang ‘yung directed focus na ginagawa natin ngayon doon sa transport assistance ang pinakamagandang paraan para maibsan ‘yung pagtaas ng presyo sa krudo (But at the end of the day, it seems that the directed focus that we are now doing with the transport assistance is the best means to cushion the rise in crude prices)," he explained. Aquino was referring to the P500-million assistance program that the Energy Department has pushed for the transport sector. Urgent, please: VAST bill Batangas Representative Hermilando Mandanas has asked the President to certify as urgent House Bill 3859 or the value-added simplified tax (VAST) bill that would reduce the VAT to 6 percent from 12 percent. Cagayan de Oro Representative Rufus Rodriguez also filed another piece of legislation – House Bill 4309 – that seeks to limit the 12-percent VAT on petroleum products if global oil prices go beyond $80 per barrel. The President also said the government has started looking into the possible expansion of the fuel subsidy to farmers and fisherfolk – albeit with apprehensions. — PE/VS, GMA News