No to Philippine Govt's Proposal to Expanded 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.