Will the real GMA please stand up?

‘On VAT, will the real GMA please stand up?’

The Senate “will waste no time” in considering any
House resolution that will seek the deferment of the
imposition of the value added tax on oil and power,
Sen. Ralph Recto made this assurance today.

“Tax bills must originate from the House. Once they
will send it to the Senate, our action will be
prompt,” Recto, chair of the Senate ways and means
committee, said.

Defer till  end 2006 ?  

Recto said the Senate may even propose a longer
deferment period, “not just until June 30 next year as
proposed in a House resolution, but even to end of
2006 or to middle of 2007.”  

“Some of my colleagues are, in fact, asking: ‘Why not
December 2006, instead of June 2006? Some are taking
the position that the nine-month reprieve until June
is short,’” he said.

Recto said nobody can predict that oil prices will go
down in June next year. “What gives those who were not
able to predict that oil prices will rise to this
level now the confidence to say that oil prices will
go down nine months from today?”

Recto admitted that “there’s even a bloc in the Senate
that wants to do away with any VAT increase, a
position that we will have to contend with, and if
such becomes the majority opinion, must be respected.”


Bill , not a resolution

Recto said legal experts in the Senate have expressed
reservations as to whether a simple resolution can
stop the effectivity of components of the new VAT law.

“Others contend that it should be a bill considering
the fact that the new VAT law cuts or scraps the
excise tax on certain types of fuel as well as the
franchise tax on electricity.  If we will just defer
VAT on these products without correspondingly
postponing the cut on the excise tax, the result will
be a revenue loss for the government,” he said.

Make up your mind

This, as Recto urged President Arroyo to make up her
mind whether she wants the imposition of VAT or not,
“following her confusing statements in New York where
she see-sawed between VAT rejection and VAT
affection.”

“To stop this guessing game, the President should
certify the passage of a law deferring the
implementation of VAT, if that is what she wants,”
Recto said.

“Congress is finding a hard time deciphering
Malacanang’s message on VAT. It seems that it has one
message for the market, which is to stick to VAT, and
one for the masses, which is to junk it,” he said.    
                                                     
                                         

“Will the real GMA please stand up?” he said.        
                                                     


GMA boys for VAT on power, oil  

This as Recto belied President Arroyo’s statement that
the administration did not push for a VAT on power and
fuel.

Recto said Senate records would bear the fact all the
presentations of the Cabinet men she sent to the
Senate declared the administration’s preference “for a
higher and a wider VAT, meaning they want all the
exemptions lifted and at the same time increase the
rate.”

“It’s on record. They were never shy in asking for a
VAT on power and oil, and to raise the current VAT
rate on covered goods and services to 12 percent,
simultaneously.  Under oath, they pleaded for these.
Their direct testimonies on these matters fill seven
pages,” he said.  (see attached Chronology of Events)

“For months we were pestered to pass this measure.
When we tried to temper their proposal we were given
all kinds of warning, including a doomsday scenario
for the country,” he said.

House wanted it, too

Recto likewise disputed reports that applying the VAT
on power and fuel was not in the House bill that was
sent to the Senate.

“Albeit on a lower rate, the House version imposed a
VAT on fuel and power. It is incorrect to say that the
House did not even contemplate on including the two on
the VAT net,” he said.

GMA veto  

Recto said the President could have selectively vetoed
the VAT bill when it was brought to her table for
signature if she was not comfortable with them.

“She had that power. She could have excised provisions
she found objectionable. After all, this was her bill.
This was not passed upon the insistence or the
initiative of the House or the Senate. We passed this
grudgingly,” he said.

Senate as scapegoat  

Recto believes that the Senate is “being set up as a
scapegoat for VAT, when what it only did is  to lessen
its impact on consumers.”

“Taxation is not a higher-is-better game. When it
comes to taxes, we do not outbid the executive. The
role of the legislature is to temper, to limit the
taxing appetite of the executive,” he said.

“A tax measure is always an administration measure,
acted on the behest of the executive which will, after
all, enjoy the collections. The VAT was passed based
on the specs given by the administration,” he said.

“This VAT is the administration’s baby. But now
they’re disowning it, denying it parentage. They’re
giving it up for adoption,” Recto said.