rroyo not worried if new VAT law is deferred
First posted 09:19am (Mla time) Sept 16, 2005
By Lira Dalangin-Fernandez
INQ7.net
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NEW YORK -- President Gloria Macapagal-Arroyo is not at all worried even if Congress succeeds in deferring the implementation of the expanded value-added tax (VAT) on petroleum products and electricity, saying it would not affect the government's goal to reduce the budget deficit.
Speaking at the Investors' Forum sponsored by the Credit Suisse First Boston, Ms Arroyo said the expected revenues from the VAT on these products are just a "windfall" that the Senate included in its version of the law during deliberations.
In fact, she said, the VAT on fuel products and electricity were not included in the proposal that Malacañang submitted to Congress.
She said she only asked for 80 billion pesos in revenues from the new tax measures, but revenues from the VAT law was estimated at 120 billion pesos. This does not include revenues that would be generated from taxes on cigarettes and alcohol and the earnings from the lateral attrition law.
"Congress gave me a bigger revenue Â*
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generation than I asked for, so if they (Congress) will do some reductions because of the resolution, there are still room for us to be able to achieve what I asked them in the first place, which is 80 billion pesos," she said.
"So if the resolution doesn't pass, then we will proceed with carrying out the reforms, and if the resolution is passed, we will respect Congress' advice to us but it does not take us away from our deficit reduction program," Arroyo added when asked how she intends to deal with the initiative of lawmakers to defer the VAT on fuel and electricity.
Albay Representative Joey Salceda earlier filed a resolution seeking to defer the imposition of VAT on those products. The other day, he said the resolution was gaining support from his colleagues as some 147 congressmen had signified their intention to co-author House Joint Resolution No. 12 that he filed.
Salceda said he believed it impractical at this time to raise the taxes on these products, which had risen 66 percent since the start of the year.
He said that a similar resolution would be filed in the Senate by Senator Manuel Villar.
The Supreme Court is expected to issue a decision before October whether to lift the restraining order on the law's implementation. The high court only recently ruled on the constitutionality of the VAT law.