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Another inutile move

The World Bank is smiling at President Gloria Macapagal-Arroyo.

In fact, it is very pleased with the President signing the expanded Value Added Tax (VAT) law or Republic Act 9339 that it agreed to loan the government $3 billion for the next three years.

Only photographers were allowed this week in the venue where GMA signed the new taxation law. Reporters were made to wait outside. In the national dailies, photos covering the event are the only items announcing the passage of the VAT law. Indeed, they are trying to be discreet about it, after the rough sailing the VAT met while still on deliberation. After all, the VAT’s impacts to the poor as presented by Bayan Muna partylist are but valid.

In the days to come, the national (smear) campaign against jueteng has taken the front page of most papers. Still, no news about the VAT law, despite its clear and concrete impact to the Filipino people once it is signed.

The country’s debt crisis has reached P5.9 trillion this year, where another $4 billion is needed (through debts, of course) to tide nation over just for 2005. Of the national budget, some P695 billion is targeted revenue for debt servicing. A study by the Confederation for Unity, Advancement, and Recognition of Government Employees (COURAGE) reports that for this year, 90 centavos will be allocated to debt servicing for every P1 the government earns.

The VAT law is expected to generate P28.75 billion in revenues for this year. It ups sales taxes from 10% to 12%, which GMA is given the standby authority to do so. Yes, it has become government’s biggest revenue-raising gimmick. It is also a proof of the government’s outstanding failure to address the country’s crisis, knowledgeable that it is that debts will continue to bloat if the roots of the economic mayhem remains ignored.

The nation’s backward state of economy is fed by foreign investments and loans. The government has no other alternative but to borrow, and borrow some more. But we simply cannot fight fire with fire. Perhaps analysts made their point when they said conditions that would facilitate an economic collapse could possibly hit the country. Our legislators, the learned people that they are, deny the possibility of an Argentina.

Once more, the government has rammed down the people’s throats a responsibility it pathetically refuses to resolve constructively. But it is not as if this is the first time the government has resorted to treason to save its face. Yet, it tolerates graft and corruption and tax evasion.

The government has developed this dependence on value added taxes, implementing such to direct and indirect tax revenues since 1993. For each product manufactured and sold, the end-consumer receives the biggest blow, since government’s taxation is based on consumption, which contradicts progressive taxation where consumers pay according to their ability to do so. The passage of the RA 9337, and other VAT bills hits everyone equally such that those with relatively higher income pay proportionally less that those with lower income. Honest tax payers will bear the brunt of this inefficient system and the exemptions some industries and individuals will enjoy.

We condemn those who supported, voted, and ensured the passage of the VAT. They know not what it takes or means to survive decently in this time of economic turmoil. We condemn the Arroyo administration for its outright disregard for the people’s welfare, as if it takes pride to its inutility and submission to the powers that be.

Should it tax certain services and industries, then it should be on the consumers’ ability to pay, not on consumption. Industries, with their obvious capacity to pay taxes according to their revenues, must be taxed on this basis. Tax evaders, the filthy rich ones that they are, must be properly sanctioned and made to pay. The propensity to graft and corruption must also be investigated, if we have to start with the First Family. The Jose Pidal exposé was never heard of again.

We commend the handful legislators who stood up to probe the constitutionality of the VAT law passage, claiming that no congressional power allows the President to raise taxes. Adjust tariffs, yes, but not taxes.

Yet, these developments will never tire us from reminding the government, in the many democratic forms we are entitled to, to take on these issues and proactively address these, even in this time of political repression and state terrorism. #

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