Roxas bats for ZERO VAT on oil as third pillar of relief package

After the passage of the affordable medicines and tax exemptions law, will the approval of the suspension of the value-added tax (VAT) on oil be next?

This is the fervent hope of Senator Mar Roxas, principal author of the recently enacted measures providing for cheaper medicines and tax exemptions for minimum wage earners.

Roxas, chairman of the Senate committee on trade and commerce, noted that the economy is in danger of slowing down because consumption has been reduced due to high prices.

“To keep the economy moving, we must provide immediate relief to consumers. Otherwise we face a triple whammy of runaway inflation, high unemployment and widespread hunger,” he warned.

“Ngayon, higit na kailangan ng mga mamimili ang pera nila. Sila ang higit na nakakaalam sa kanilang mga pangangailangan, kaya mas mainam na maiwan sa bulsa nila ang perang ito kaysa mapunta pa sa mga leakages sa gobyerno,” he said.

The senator authored Senate Bill No. 1962 which seeks to suspend the 12% VAT on oil to give consumers a much-deserved respite from soaring prices.

Roxas also authored the recently enacted Universally Accessible Cheaper and Quality Medicines Act of 2008 and the Tax Exemption for Minimum Wage Earners Law which was signed by President Arroyo this morning.

The Liberal Party president said he is hoping that his bill calling for the suspension of the 12% VAT on oil would be the third law to be included in the package of relief measures legislated at this time of crisis.

“They say that good things come in threes. Unfortunately, the administration has limited its options to subsidies for certain sectors. It continues to ignore the fact that a temporary removal of the VAT on oil will be felt directly by each consumer with no cash out from the government,” Roxas added.

The newly-signed Republic Act No. 9504 will provide minimum wage earners in the private sector, as well as government workers with the equivalent of a minimum wage salary, with an additional take-home pay of P34 per day, or P750 per month, by exempting them from income taxes. It also increases the personal exemptions of all individual taxpayers.

Republic Act No. 9502, the Universally Accessible, Cheaper and Quality Medicines Act, was signed last June 6. The law seeks to increase competition in the local pharmaceutical market. It allows the importation of more affordable medicines from abroad, and also supports the development of local generics firms. The law also gives the government the powers to regulate prices when necessary, and strengthens the Bureau of Food and Drugs.

Roxas’ SB 1962, filed last December, would suspend the VAT on oil for six months, after which the executive would be allowed to restore the VAT in full or on a staggered basis.