Expanded Valued Added Tax In The Philippines
The present government is facing a lot of controversies against Gloria?s administration. The gift checks, anomalies involving different officials, ZTE Broadband deal, leads to the massive problems of graft and corruption. From the smallest branch of government institutions up to Malaca�ang, graft and corruption is very evident. Last July 28, 2008, the issue on the Expanded Value Added Tax (EVAT) implemented by the government became as the hottest issue on the President?s SONA .
Let us define first what taxation is. According to Dimaampao (2005), ?taxation is a mode of raising revenue for public purposes. It is not given voluntarily, but is implement by laws. The people are obliged to pay taxes in proportion to their income or some other source. A good example of tax is the Expanded Value-Added Tax (EVAT), which was fully implemented last November 1, 2005. Expanded Value-Added Tax (EVAT) from the definition itself is a value added tax that increases in its scope. It simply means the increase of tax, which is being paid by the people. This is where the government gets the fund for its program for the country. This law extends the tax base to include the fuel, electricity and transport industries. However, the old value added tax (VAT) law covered most food industries. Compared EVAT with the old one, EVAT increased the tax at rate of 12% unlike the VAT, which is 10% only.
What are the government reasons for EVAT?s implementation?
Mrs. Arroyo was aiming for a balanced budget by the end of her term this 2010 and hoping that fiscal reforms would result in more income for the government that would translate to more social services, improved education, and attract new investments that would enable her to create up to 10 million jobs and bring the Philippines into the threshold of prosperity.
According to Finance Undersecretary Gil Beltran, ? The poor benefits from the VAT, because the tax are used to fund additional social services for them." President Arroyo will be using the revenues that she will get from VAT to help the poor people. A percent of what she will get will be spend on poor students by providing them scholarship programs. Another part is to give financial help to those buses, taxi?s and jeepney owners to convert their engines into units that run on the more economical LPG and compressed natural gas. Moreover, the excess revenues from the VAT used to subsidize rice, which is being sold to poor at Php 18.25 a kilo.
On the other hand, the assurance that the increase in the value-added tax would not help the poor, was, really an administration press release designed to head off public opposition to the plan. Taxation is meant to be equally applied to all; everyone should bear the burden. However, it seems that bill is just making the rich to be richer and the poor to be poorer. Majority are affected on this bill, but sectors that profit the most?oil, energy, telecommunication ? will still get among within many and lucrative exemptions.This is not to say that these industries do not contribute to national development, but it is to say that they also retain far more of the profits than the ordinary citizen or even the ordinary businessman.
The opposition as well as the ordinary group leaders and organization are calling for the government attention to remove the EVAT as it will do no good for the country.
Another reason why the opposition disagrees with the implementation of EVAT is that, graft and corruption will be augmented. According to Gordon, ?the problem with the government is that it is not transparent on where the funds are being spent.? He said the government should focus more on job creation rather than the EVAT, which is just being a burden and seems not helping at all. Senator Manuel Roxas II said that the government must not deceive the public into thinking that the tax measure is the only means to fund in pro-poor programs. The government may explore other means to fund its pro-poor programs such as improving, collection efficiency, reviewing its spending program and re-channeling funds to more urgent programs. Now the prices of commodities are still on its high prices, the government should but continue to be dependent on a socially sensitive product for its revenues. It?s riding on the people suffering; it?s making the poor pay for government inefficiencies.
To summarize, the government officials believe that implementing EVAT is the best way to reduce our debt problems of the Philippines. In contrast, many opposition leaders think that it would not help; instead it can make lives of people more difficult. In our present situation, the government should also consider the economic status of the country. They should enact laws that protect the people to ensure the survival of future generations. Moreover, they should understand the situation that more people are suffering, because of the high amount of taxes they asked. The problem must be given solution as soon as possible. The most important of all is that, the improvement of a country could not only be seen through infrastructures, but also in the way its people live.
Written by anarose
