BUSINESS MIRROR
SUNDAY, 11 SEPTEMBER 2011 20:23 BUTCH FERNANDEZ / REPORTER
SEN. Ralph Recto warned on Sunday that the looming simultaneous increases in transport fares, toll and power rates the government plan to impose soon on overburdened consumers and commuters on top of recent oil-price hikes could be a formula for social unrest, as what has been happening in strife-torn countries in Europe and the Middle East.
“That is possible,” Recto said when asked if the seemingly synchronized increases in Metro Rail Transit (MRT) and Light Rail Transit (LRT) fares, the imposition of the 12-percent value-added tax on toll rates at the North and South Luzon Expressways and the estimated P15 increase in monthly electric bills as petitioned by power companies, compounded by skyrocketing fuel prices could spark turmoil and discourage spending by taxpayers, further dampening growth prospects.
He suggested that the government should rethink plans to “do it all at the same time” as it would hurt not just the poor but middle-class taxpayers, as well. He said that while the government can claim it cannot do anything about the soaring prices of imported oil as these are dictated by the world market, “it can do something” to suspend planned increases in MRT-LRT fares, toll and power rates.
Recto recalled that an additional VAT on fees to be collected from motorists and commercial traders using toll roads was never intended to be included by Congress when it crafted both the original and the expanded value-added tax laws. “Hindi iyan nakasulat sa batas,” he said, adding that when the original tax law was discussed, “no one thought of including VAT on toll; and if it was really included it should have been imposed long before. So, this is a new tax, which is in breach of this administration’s vow that there will be no new taxes,” Recto said, speaking in Pilipino.
He argued that the VAT on toll is a new tax because “wala ’yan since the time pa” of former Presidents Cory Aquino, Fidel Ramos, Joseph Estrada and Gloria Arroyo.
Still, Recto said he has filed a bill effectively exempting highway toll from VAT “para maliwanag na.” The remedial legislation is expected to be heard by the Committee on Ways and Means that Recto chairs.
He also signified support for a proposed resolution earlier mentioned by Sen. Joker Arroyo asking the Aquino government to defer the planned increases in MRT-LRT fares, monthly electric bills and road tolls, even if he has yet to see it.
In the same interview, Recto hastened to clarify that as an administration senator, he is committed to support President Aquino, as well as Transportation Secretary Mar Roxas, who sits as president of the ruling Liberal Party to which Recto is allied. “I am not quarrelling with President Aquino and I will follow him and also Roxas who is our party president in the LP. But it is wrong to say that provincial taxpayers are the ones subsidizing Metro Manila commuters riding the MRT, when it is the other way around as Metro Manila taxpayers are the ones bearing the brunt of the cost of the conditional-cash transfer dole- outs in the countryside. Huwag natin pag-awayin ang mga taga-probinsiya at taga-Metro Manila.”
The best way to raise revenue for the government, Recto said, is to make the economy grow; not by burdening the middle-class sector with taxes and fare and power-rate increases and failing to create jobs by not spending what they have collected in taxes and fees. “I do not fault the government for underspending during the first two quarters due to concerns over rampant misuse of public funds by the previous administration, but by the third and fourth quarter they should already know how to spend the public money properly to spur growth.
“Do not squeeze the middle class that pays taxes; they are willing to subsidize the CCT [dole-outs] but why remove the MRT subsidy for the middle class. Hihina ang economy if you squeeze the middle class and jobs will be lost,” Recto said, pointing out that “this is the catch-up decade for us, we should not miss the opportunities. Palaguin natin ang economy.”
Meanwhile, a party-list congressman representing the transport sector has pushed for the approval of a bill that seeks to exempt toll collected by tollway operators from the coverage of the expanded value-added tax (E-VAT) law and the National Internal Revenue Code “so as not to further burden the Filipino people during these times of economic hardship.”
House Bill 5171 seeks to amend Republic Act 8284, or the National Internal Revenue Code (NIRC), and Republic Act 7716 or the E-VAT law. It provides that tollway operations shall be excluded from, and hence, not covered by, the meaning of “sale of services” that are subject to VAT under Section 108 of the NIRC.
As embodied in the measure, tollway operators shall also be excluded from the coverage of the definition of “franchise grantees” under the same section of the NIRC.
Party-list Rep. Homer Mercado of 1-Utak, author of the bill, said there is now mounting opposition to the implementation of VAT on toll and thus, the need to defer its implementation.
He said this despite the recent Supreme Court ruling dismissing for lack of merit a petition for declaratory relief from the VAT imposition on tollway collections of operators.
Mercado said several groups have called on the Bureau of Internal Revenue and the Toll Regulatory Board to conduct further consultations that should include stakeholders in the provinces who will be directly affected by the impact of VAT-inclusive toll, which would consequently push up the costs of agricultural produce, bus fares and basic goods being transported through the major expressways from the nearby provinces.
Mercado said the issue at hand is impressed with public interest as the huge increase in VAT-inclusive toll will affect not only the hundreds of thousands of motorists who directly use the major expressways but also the potentially millions who will be indirectly hit by the toll hike.
“As such, in these times of economic hardship, not to mention the advent of typhoons affecting the National Capital Region and nearby provinces, there should be an amendment to the NIRC and the E-VAT law to ensure that no further unnecessary burden be permitted by the government that will aggravate the poor conditions of the majority of the people,” said Mercado. (With Fernan Marasigan)
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