Aquino gov’t shouldn’t wash hands off VAT on toll fees

The umbrella group Bagong Alyansang Makabayan today criticized the Aquino administration for “washing its hands” in the issue of the Value Added Tax on toll fees set to take effect on Monday. The group said that Malacanang’s reasoning that the VAT is an old law from the previous administration is unacceptable.



The previous government of Gloria Macapagal Arroyo enacted a law that expands the coverage of the VAT to include oil, power and other services. The Bureau of Internal Revenue is pushing for the coverage of VAT on toll fees. Some lawmakers have opposed this saying that government services like toll ways should not be covered by the VAT. A petition is now pending before the Supreme Court asking it to issue a temporary restraining order on the implementation.

“The Aquino government cannot hide behind the feeble defense that the VAT is an Arroyo-era law that needs to be implemented. The present government has all the powers to stem the implementation of onerous taxation and spare the people from further hardship. The VAT on toll has not been implemented since 2005. Why is the BIR in a hurry to implement it now when there are many questions as to its validity?” said Bayan secretary general Renato M. Reyes, Jr.

Bayan believes that the implementation of the VAT sets the tone of the Aquino government’s fiscal policy.

“It seems that the Aquino government’s fiscal policy is to pass the burden to the people. Fast-tracking the VAT on toll is meant to pass on to the people the humongous budget deficit and public debts incurred by the past regime. Instead of providing immediate economic relief, the Aquino government is promoting additional economic burdens for the people,” said Reyes.

“Aside from the VAT on toll fees, government is also readying a fare hike for the MRT, another added burden on the people,” he added.

Bayan believes that the revenues from the VAT on toll fees will not go to poverty alleviation programs but rather to paying off government debts incurred over the last nine years.

“The claim of Sec. Lacierda that poverty alleviation programs will be the result of additional taxes is something we’ve heard before. That was the same promise given by Arroyo when she first implemented the EVAT,” Reyes said.

“The reality is that for every P10.00 raised by government, P6.00 goes to debt spending. That is how it has been for some time now. The new government doesn’t seem to be departing from that,” he added.

Quoting reports from the Bureau of Treasury, Bayan said that as of the first half of the year, national government debt spending has risen to 12% or some P406 billion compared to the same period last year when it spent P361.5 billion.

“Let’s not mislead the people that poverty alleviation projects will come about when what the government is really spending for is paying off debts,” Reyes said.### Aquino gov’t shouldn’t wash hands off VAT on toll fees