No to Philippine Govt's Proposal to Expand VAT Rate

The Philippine government has no moral authority

to collect taxes.

This government has no moral authority to collect

taxes because it has failed miserably in its most

basic of functions – which is to deliver services to

the people.

A government collects taxes from its people based on

the premise that it uses these funds to provide

services for the people. While this government is

bleeding the people dry by asking more taxes, it is at

the same time systematically cutting back on social

services and passing many of its obligations on to the

private sector. And the private sector willfully

obliges, taking government incapacity as an

opportunity to gain profits from the captive

consumers.

This government asks the people to shell out more

money. But for what? To cover up for its inefficiency

and fiscal mismanagement!

We challenge the Arroyo administration to perform its

functions and obligations to the people first before

asking them for additional taxes such as VAT. People

are ready to contribute more to the Treasury for as

long as they see every peso they pay in the form of

much-needed services. Contrary to the UP School of

Economics Econ 11 position that the proposed VAT rate

increase will “stave off a crisis and contribute funds

for social development and infrastructure,” our

coalition believes that this government will only use

the expected VAT yield to service the gargantuan

public debt and to maintain its good standing with

creditors.

The entire public sector debt must be thoroughly

examined in a debt audit. We urge the Senate to

approve immediately the Joint Resolution creating a

Congressional Commission on the Debt Audit that the

Lower House has already approved last September.

We also challenge the government to stop paying all

illegitimate debts, including the remaining $48

million balance for the overpriced and mothballed

Bataan Nuclear Power Plant. The coalition likewise

calls for the review of privatization programs for

services and utilities.

Corruption and ineptitude are virtually systemic in

the tax bureaucracy. These are the main reasons for

government’s failure to generate the correct amount of

revenues. The people are put at the mercy of a flawed

and inefficient tax collection system.

I hope that the

government should contemplate in imposing new taxes, it

should first provide much needed services to the

people, audit all public sector debts, and score major

successes in its campaign against graft and

corruption.