Senator Mar Roxas said the government should now support moves for zero value-added tax (VAT) on oil, now that the government has admitted it would not anymore meet its balanced budget target this year due to slower growth.
"When oil was at $90 per barrel at the beginning of the year, that target of a balanced budget this year has become impossible. The economic growth for 2008 would necessarily be affected," he said.
"But more than the fiscal targets, the government should look more closely at how our consumers are facing a perfect storm of food and oil price hikes," he said.
He said oil prices now are four times more expensive than when the expanded VAT was still being deliberated. This is one of the reasons cited as to why growth, especially consumer spending, slowed down in the first quarter.
The Chairman of the Senate Committee on Trade and Commerce pointed out that when the proposal to impose a 12% VAT on oil was still being deliberated, Dubai crude was still around $34 per barrel. Now, the price of Dubai crude has reached $120 per barrel. This means if the government earlier expected to collect around $4 of VAT per barrel of crude, it now collects around $14 per barrel, or excess revenue of around $10 per barrel.
"Ang laki-laki na ng makokolekta ng gobyerno mula sa VAT sa langis, higit doon sa inaasahan nila noon mula rito. Bakit pa nila ipinagdadamot ito (Government's expected to collect so much more than what it originally expected. So why are they refusing to return it to our consumers)?" he said.
"Even at the best of times, even when the administration was crowing about 7.3% growth, the revenue agencies were not attaining their targets. So to begin with, strong economy or weak economy, the revenue agencies were not attaining their projections," he explained.
The Liberal Party President stressed if the government really wants to help consumers and protect the "real economy" at this time of crisis, it must immediately support moves to suspend or remove VAT on oil.
"Maaari na ayaw nila ito sa simula. Noong nasa $90 per barrel ang langis, tinanggihan nila ito. Ngayon na nasa $130 per barrel na ang langis, mukhang nagkakaroon ito ng buhay sa Kamara," he said.
"Hindi nila dapat ipagdamot itong pera kasi hindi nila pera ito. Pera ng sambayanan ito," he said.
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