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Philippines Committed to Implementing Expanded VAT Law Amid Public Concerns

Strategic Insights

— 1 min read

The Philippine government remains committed to implementing the expanded value-added tax (VAT) law, despite ongoing public concerns about the potential impact on inflation. According to Finance Secretary Margarito Teves, the government needs the revenue generated from VAT to achieve fiscal consolidation and avoid a budgetary crisis that could exacerbate hardships for the poor. The government has implemented measures to mitigate the effects of rising pump prices, including removing the excise tax on diesel, kerosene, and bunker fuel oil, and reducing the import tariff on petroleum products. However, concerns about inflation persist, with Rep. Joey Salceda warning that pump prices could rise beyond P40 per liter even with these measures in place.

Key Takeaways:

  • The Philippine government remains committed to implementing the expanded VAT law, despite ongoing public concerns about inflation.
  • Finance Secretary Margarito Teves emphasized the need for VAT revenue to achieve fiscal consolidation and avoid a budgetary crisis.
  • The government has implemented measures to mitigate the effects of rising pump prices, including the removal of excise tax on diesel, kerosene, and bunker fuel oil.
  • The removal of excise tax reduced the price of diesel by as much as P1.63 per liter, while the cut in import tariff reduced the price by as much as 50 centavos per liter.
  • Rep. Joey Salceda warned that pump prices could rise beyond P40 per liter even with these measures in place.
  • The government aims to balance the budget by 2010 or sooner, as outlined in the Medium-Term Philippine Development Plan.
  • The national government could not afford to forego the revenues projected to be raised from the VAT law, according to Teves.

Statistics:

  • Crude oil prices have risen to $67.10 per barrel in the New York Mercantile Exchange.
  • Pump prices of diesel and gasoline could rise beyond P40 per liter, according to Salceda.
  • The removal of excise tax on diesel reduced the price by as much as P1.63 per liter.
  • The cut in import tariff on petroleum products reduced the price by as much as 50 centavos per liter.

Sources:

  • Asia Pulse - Finance Secretary Margarito Teves on Monday assured the national government remains committed to implement the expanded value-added tax (VAT) law, once the Supreme Court lifts the temporary restraining order on the measure.
  • (PNA) 15-08 1849

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