We see that the International Monetary Fund is standing four-square behind the government’s refusal to scrap the value added tax on oil and, by extension, on power rates, and sticking to providing direct support to the poor in this time of surging prices.
Government’s refusal to scrap the VAT on oil is based on the simple fact that revenues continue to lag behind spending. It needs the money and it is loathe to lose any source of revenues. We have this suspicion the purported direct transfers to help the poor cope with rising prices of food and other necessities are but an after-the-fact rationalization.
Mar Roxas, among the few senators with a solid grasp of economic issues, has noted that when the VAT system was expanded to include oil (and also electricity), crude was trading in the world market for $34 a barrel. Now the price of crude is around $131 a barrel.
Roxas said this means that government was collecting around $4 in per barrel when VAT was first applied on oil. Now is it collecting $14 barrel.
The irony here is while the government is decrying the runaway prices of world crude, it is in fact earning handsomely as a result of the price escalation.
Since prices of oil have a cascading effect on practically all goods and services, government VAT earnings increase proportionally as we go down the production chain.
(We have heard some officials muse about taxing oil companies for the extra-ordinary gains they made from old oil stocks by selling their products based on current crude prices. Doesn’t the same apply to the government’s windfall collections from the VAT on oil?)
Surely this is not the intention – to collect more revenues simply as a function of price increases – when the VAT was expanded.
Let’s take a deeper look into the anomaly. Had oil prices stayed at $34 a barrel, the government deficit would now be higher by an amount equivalent to the windfall VAT collections from $130 a barrel crude. What’s the conclusion we can draw then? It’s this: The government has miserably failed in collecting taxes from sources other than VAT. Despite all the claimed reforms in collection efforts, taxes raised from income have not grown as fast as the government makes us believe.
Malaya editorial:
The government, in effect, has been trying to make us believe all is well on the collection side because of the windfall from VAT.
And what about this purported wisdom of giving direct cash transfers to the poor instead of a society-wide relief from the VAT on oil?
In theory, there’s nothing objectionable to the policy. In practice, it means more money to steal as the funds flow from the treasury to the purported beneficiaries.
Hooray! Cant wait again I can already pick up from the junkyard a posh vehicle for a steal at the rate the oil price is risng.
I don’t drive in Japan, so I don’t worry about the present oil crisis. I have US driving license, though. I drive over there not in Japan as I am not used to driving on the left side of the street and the wheel of the car on the right side.
Over here, the rise of oil is not as fast as in the US. People lined up in fact when the price of oil was announced to be increased just a few weeks ago, and tried to get as much oil as they could more I guess for the feel of it, kind of for good old memory’s sake than for anything else, because Japan has no way of forcing oil producers selling their oil to Japan to lower down their prices. All that we can do is negotiate for better rate in exchange for Japanese aids.
The gas station people are themselves worried about the effect of these price hikes to their business for surely less and less people will now want to drive their cars and use the available public transportation especially with our trains moving on schedule unless there is an accident or natural calamity.
Apparently, the time has come for God to shut down a lot of these oil reserves in order to stop the likes of the mad man at the White House from making an excuse of terrorism to attack oil-producing countries like Iraq, Iran and even Venezuela. Kaya iyong pangarap ni Gloria Dorobo sa Spratlys, etc. kasinungalingan din iyan. Gusto lang niyang ipambayad ang mga lupang hindi naman kaniya sa mga inutang niya sa Tsina at unti-unting kinukupit and stash in some foreign banks.
Indonesia for instance has announced that it can no longer produce as much oil as to share with other countries so it is limiting its oil production for domestic consumption. Iraq is not producing enough because of the continued resistance against US invasion and aggression.
For better understanding of this issue and greed for oil, I recommend visiting
http://www.informationclearinghouse.info
Kawawang Pilipinas!
I am paying $4.25 for one gallon of gasoline,if they remove the fuel tax and road tax maybe,one gallon of gasoline will only cost less than $3.70 a gallon.Just imagine how much money goes to the coffer of the government everytime we fill our gas tanks.
Actually,gasoline are not that expensive if we adjust for inflation, today’s gas prices are not low, but they are not extraordinarily high. We can also be comforted by the fact that we’re not sitting in three-hour-long lines to get gasoline, as many did during the oil “crisis” of the late 1970s. typically we have more disposable income today than in the past. Annual gasoline bills are a burden portion of most people’s household bills now, and swings in gas prices are shockof a pocketbook. Of course, these factors are little comfort as we watch the numbers on the gas pump spin faster than the lemons and cherries on a Vegas slot machine, but they’re important reminders that can help us keep our high-octane outrage in check.
Who should be blamed for the high oil and gasoline prices? OPEC? The oil companies? The Pidal government? Or Bin Laden?
Visit my site maybe,you’ll find the answer.
For every Dollar we pay for Gar here in Canada 47 cents go to different taxes plus royalties to the Province of Alberta, yet with the increase of oil prices of double from 64 to high of 134 a year ago the price at the pump only rise from average $1.17 to $1.27 for the period. not a one to one match in increase since there are other factors that will affect the final price at the pump. Politicians and advocacies are very vocal against sudden rise and also conservation may have helped temper the substantial increases..the law of demand and supply will work to your advantage with a good sensible Conservation programs..buying a fuel effecient cars will get you up to $2000 rebates from the Federal government while going for gas guzzlers will set you back up to $4000 in punitive taxes.. it works, that Honda Fits and Civics and Corollas and other fuel effecient cars are the Best Sellers now.
the government is still cash strapped, and this can be glimpse from the actions of different agencies. BIR has never been so aggressive before even threatening garnishment and suits to private and other (fellow) government agencies.
ganuon din sa GSIS-Meralco, pera lang ang hanap. not on lowering rates in the public’s favor.
namumulubi na ang gobyerno, namumulubi na rin ang kawawang bayan. thanks for a very sound economic fundamentals.
Napapakamot ako ng ulo pag naaalala ko na iniwan na ng Saudi-ARAMCO ang Petron at ibinenta sa Ashmore na ang negosyo ay investments.
Ang tanong ko, bakit umalis ang mga Arabo, kinokotongan ba sila? Napakaganda na sana na meron tayong kapartner na siyang may pinakamalaking oil reserves, tapos pinabayaan lang natin.
May nakatago bang istorya sa likod niyan?
Tongue, you are asking the right questions.
The Saudis are proud people. They dont want other noisy people around them so much more with corrupt host.
Yung nag-coup para kay evil bitch, si Sec Reyes ay nasa Energy. Yung ala-Rasputin (raspy voices na walang mga modo) na mga anak ni evil bitch ay head ng comittee ng energy. Yung si Chu-very (Zubiri) ay nasa alternative energy. Alam ng mga ito kung nasaan ang pagkakaperahan! Need I say more?
PSB: Yung ala-Rasputin (raspy voices na walang mga modo) na mga anak ni evil bitch ay head ng comittee ng energy. Yung si Chu-very (Zubiri) ay nasa alternative energy.
*****
Sinabi mo pa. Kaya nga lalong gutom ang aabutin ng mga pilipino kundi pipigilan at this stage ang mga ungas pushing for the biofuel kuno.
Truth is that farmers in Negros for instance are spilling the beans regarding some piece of land being allegedly granted to the Chinese for development of some biofuel project over in their province; that they are being forced to sell their harvest to the Arroyos for instance for the Chinese to convert to biofuel once the factory there is constructed.
This should be looked into in fact by crusading members of the Philippine Congress and Senate if there are still any over there. They should act as a group as a matter of fact on issues. Kung iisa-isa nga naman, walang mangyayari dahil magaling si Dorobo and Company humanap ng butas kahit irrelevant gaya ng ginagawa for instance kay Lacson na paulit-ulit na lang ang pagbabanggit ng kuratong bulotong whatever that is.
Problema kasi sa Pilipinas iyong mga pulis mahilig lang mamaril. Over here, maraming matataggal sa position sa pulisya pag ginawa nila iyong istilo ng mga pulis sa Pilipinas na kung sinu-sino lang ang pinagbibintangan tapos binabaril ag mga testigo lalo na kung may kasabwat na pulis para hindi makatestigo. Anong klaseng hustisya ba meron ang bansang iyan? Palakasan pa! Yuck talaga!
Gumaya sa mga kano iyo pang mga masagwa sa mga kano ang ginagaya!
Kaninang umaga sa Palengke, ang isang long neck na mantika, tapwe na ang presyo!