Consumers Domain
By Ian Seruelo

VAT, expanded for whom?

“Noah must have taken into the Ark two taxes, one male and one female. And did they multiply bountifully! Next to guinea pigs, taxes must have been the most prolific animals.”

—Will Rogers

Increased revenues. Fiscal stability. Balanced budget. According to President Arroyo, these are what the expanded VAT and her other measures will achieve.

I have been monitoring this issue on VAT and the fiscal measures of the Arroyo administration more closely since middle of last year when she herself admitted that the country is in a fiscal crisis. Well we are still amazed by how fast the fiscal crisis was arrested as our economist President declared before the end of last year that the same crisis was over.

Now after the passage of several measures which include the increase in sin taxes, the lateral attrition law and its centerpiece the expanded VAT, the administration is trumpeting the good news to the Filipinos.

This they say will lead to increase revenues for the government so that the budget deficit will be arrested. The expanded VAT and other revenue measures, according to the government would be used mainly in bringing down the budget deficit.

They say, with these new measures in place we can expect to achieve a balanced budget as early as 2008 and thus financial stability and growth for the country.

Yes they say: Increased revenues! Balanced budget! Fiscal stability!

But ask an ordinary taxpayer if he or she is excited of these seemingly positive words. Ask an ordinary wage worker if he or she finds those phrases meaningful. Ask a sidewalk vendor if such beautiful phrases ring a bell. Ask the homeless urban poor if those declarations give even an iota of hope.

Most probably, all you will get is a blank apathetic stare and the phrase: “Ti ano karon?” (“So what about it?”), or an angry “Sige saka sang buwis, sige saka naman balaklon, pero sweldo namon amo guihapon!” (Tax is increasing, the prices of commodities are increasing, but our salary remains the same!')

The bottom line that we ought to ask the government is how will all these “ek-ek” (may be translated as “hullabaloo”) ease the burden of poverty of the Filipinos. Will this increase in taxes translate to better social services such as health care, education and housing? Will this increase in revenues of the government signify the building of more farm-to market roads, accessible credit programs and other economic services?

Is a decreasing budget deficit a telltale sign that happy days are coming? Will a balanced budget by 2008 mean that the capacity of Filipino families to provide three square meals a day for themselves will improve three years from now?

Filipinos are tired of expecting an improvement from this government. We can't blame them if many has become apathetic as they are busy looking for means to ensure the survival of their family, their children.

What is sad is the fact that most of these increases in taxes and government revenues will only be drained out to spending for the servicing of the country's debts, not to mention corruption.

What is P80 billion, the amount expected to be raised by the expanded VAT in a year, compared to the P600 billion that is allotted by the government for debt payments for this year alone. The fact is interests and principal debt payment for this year is equivalent to almost 90% of the targeted government revenue for this same year!

Until this government directly responds to the problems of the nation by steering its fiscal and spending policies towards the real needs of its population, we can never expect all these measures to be meaningful to the lives of the ordinary Filipinos.

So again we ask – VAT, expanded for whom?

* * * * *

This column would like to congratulate the Freedom from Debt Coalition (FDC) for successfully holding their 9 th National Congress last May 14-16, 2005, at the UP Diliman campus and the PRRM Building in Quezon City. The gathering had a very relevant theme: “Building people's resistance and alternatives in the face of poverty, crisis and neo-liberal globalization.”

More power to FDC! More power to the people's struggle!

(For comments and suggestions, please email ianseruelo@yahoo.com or send SMS to 0919-348-6337.)