Iglesia ni Cristo throws support behind VAT

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By Jess Diaz (The Philippine Star) Updated February 05, 2005

The influential Iglesia ni Cristo (INC) is lobbying for Senate approval of the bill that seeks to increase the value added tax (VAT) from 10 percent to 12 percent.

Senate sources told The STAR yesterday that two top INC officials have been paying senators a visit since Monday to seek their support for the VAT measure. Two senators, one from the administration and the other from the opposition, admitted that the two INC officials called on them this week.

“They were expressing their support for the bill and implicitly asking us to do likewise,” the administration senator, who did not want to be identified, said.

On the other hand, the opposition lawmaker said the INC is lobbying for VAT “upon the behest of Malacañang.”

The influential religious sect supported President Arroyo in the May 2004 presidential election.

At the VAT hearing in the Senate yesterday, incoming Finance Secretary Cesar Purisima said the VAT increase “is not about rising prices but (about) trying to bring down the overall cost of doing business in the Philippines.”

“The passage of the VAT bill will further strengthen the peso as it will enhance both consumers’ and investors’ confidence in the government’s ability to solve its fiscal problem. This will unleash further liquidity in both the domestic and financial markets that will provide continued strength and stability to the Philippine currency and may even have a dampening effect on domestic interest rates,” he said.

His statement was read by Finance Undersecretary Emmanuel Bonoan. Purisima has been inexplicably staying away from the VAT hearings.

In a related development, Sen. Joker Arroyo said if Congress decides to levy a value added tax on petroleum products and electricity, it should be the oil companies and power producers that pay the VAT.

He said he and other lawmakers should make sure that in the VAT bill they approve, oil and power generation firms would absorb the VAT instead of passing it on to consumers.

Arroyo expressed anger over the testimonies on Wednesday of representatives of these companies that since VAT is a consumption tax, they would just add whatever amount of levy that is imposed on them to the cost of diesel, gasoline and other petroleum products, and electricity.

Many senators, from both the administration and the opposition, have parroted this line and have obviously accepted the apparent inevitability of the ordinary consumer ending up paying the VAT on fuel and power.

Arroyo fumed that lawmakers could be “so naive, so idiotic as to accept the bogey foisted by the oil companies and IPPs (independent power producers) that they would just pass on the new levies to the consumers.”

He said, in effect, the oil companies and power producers are telling Congress, “Go ahead, it won’t prejudice us, it would prejudice the consumers.”

He lamented that many of his colleagues and even Malacañang fell for “this farcical argument.”

“The oil industry and the IPPs have in effect challenged Congress, however subtly, to go ahead and get them. Congress cannot back down on this. Congress is certainly not lacking in ingenuity and creativeness that it cannot craft a bill that will lift the VAT exemptions for oil companies and power producers and effectively prevent them from making others pay for them,” Arroyo said.

He pointed out that in these difficult times, all sectors are being asked to tighten their belts and to help the nation stabilize its fiscal condition by contributing more taxes.

“Only the oil companies and IPPs are smugly out of step,” he stressed.

Arroyo warned his colleagues that if they accept the “insulting” argument of oil and power generation firms, “Congress would become so inutile that it can be held hostage by vested interests, which cannot be.”

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