EVAT's day 1 draws varied reactions from Ilonggos
Day one of the nationwide implementation of the 'dreaded' and much-hyped expanded value-added tax (EVAT) came yesterday (Tuesday) yet for many Ilonggos, it would be a 'wait-and-see' attitude. 'Wait' for the specific effects in about a week's time and 'see' what could be done, if any, particularly on those in the business community here.
Rey Pelongco, owner and manager of a favorite local seafood restaurant by the Diversion Road said Y2K will keep its prices alongside the rates of the carwash services. Yet he also disclosed of preparations for the price adjustments if and when significant increases will happen courtesy of the EVAT.
Till then, Pelongco said his regular customers and new clients will continue to get by the EVAT with not much of an effect at least in his restaurant and carwash.
Same sentiments from Rafael 'Tibong' Jardeleza of Mundo Ristorante, home of ribs, brick-oven pizza, pasta, burgers and steaks. This as he admitted that with the EVAT implementation comes unresolved concerns on the coverage of exemptions and non-exemptions that he and other Ilonggo key players in the restaurant industry face.
Will he raise prices then? A quick no, he replied while adding that being 'consumer-friendly,' he opts to carry the EVAT aftershock rather than have his customers bear much of the effect. As it is though, he hopes to get a clearer understanding of this latest government tax measure saying they are awaiting official word from Bureau of Internal Revenue (BIR) on the EVAT implementing rules and guidelines.
As designed, EVAT will mean about 6 percent more in fuel prices, electricity, airfare, food and beverages, tobacco and other 'sin' items. The VAT law is 'expanded' because it now includes petroleum and power which were earlier exempted from the measure before the law was passed to expand its coverage. Once realized, EVAT proponents said it stands to be the biggest single step the government can take to improve the country’s fiscal health where some P4 billion to P5 billion will be collected this year and P77.6 billion in 2006.
In a report, Department of Finance data show that about 83 percent of the VAT will be paid by the wealthier half of the Philippine population and that 17 percent will be paid by the poorest 50 percent. The finance department considers 'poor' a Filipino individual earning P60,000 annually and 'middle-income' a Filipino earning P250,000 annually.
For the bottom 50 percent of the population, the impact of the EVAT will largely be in food, beverage and tobacco, accounted for by 65 percent of their VAT payments. It will result in a price increase of 0.6 percent because of the VAT.
'There is no need to panic,' longtime gas retailer Boy Jardeleza of Caltex Jaro in Lopez Jaena Street said. 'The increase and price adjustments that we did midnight of Tuesday was very minimal. In my opinion, this will actually help bring in much-needed help for the government. I think there is just misrepresentation from other groups on the EVAT effect and I don't know to what purpose. What we want in the (gas) industry is to have a stabilized economy. Increase in sales would mean increase in hired help and increase in the taxes we pay.'
With over three decades in the business of gas retailing, Boy Jardeleza said of late though a considerable decrease has been observed in fuel consumption of the Ilonggos despite the increase of the number of vehicles throughout the city and province.
And weekdays are now the usual 'peak' for gas sales with weekends 'slow days' for them.
'It only means that the Ilonggos have now stopped long drives as compared from before,' he said. The pump prices as offered by Caltex here recorded a 24-centavo increase in diesel price per liter while gasoline had a P2.55 difference per liter.
Converted into price difference, a full-tank of a diesel engine vehicle would experience about P14.40 pesos more in expense now with the EVAT and about P127 for full-tank of gasoline powered-cars.
To note, Energy Secretary Raphael Lotilla has since assured that today’s prices of major petroleum products will reflect only minimal increases because of the lower prices in the international market.
He said increases in pump prices will not be as exorbitant as earlier expected yet are 'inevitable' as a result of the 10-percent VAT imposed on fuel. But the lower cost of raw materials and imported finished products is cushioning the price increases that Filipinos will pay.
However for anti-EVAT proponents, this tax measure is nothing but a 'burden' and will bring to an end the significant gains enjoyed by the Ilonggos in the victory over the rates of the Panay Electric Company (PECO).
Ted Aldwin Ong of the Freedom from Debt Coalition (FDC) said their group and the broad alliance of the Laban ng Masa Panay-Guimaras chapters continue to strongly condemn the decision of the Supreme Court that upheld the constitutionality of the EVAT.
'Electricity rates will increase by not less than 50-centavos per kilowatt-hour due to EVAT. Worst, almost 80 percent of the so-called revenues to be generated from it will only go to debt-servicig, some of which are illegitimate and from onerous transactions,' Ong said.
To recall, FDC thru its chairperson, lawyer Romeo Gerochi fought and won the battle against PECO that reduced considerably power rates in the city.
'The Ilonggos must protest the lifting of the TRO on EVAT in order to protect our hard-earned victory against Panay Electric Company. Again, it's time for us to unite as we vow for more protest action against the implementation of EVAT and to the policies of the Arroyo regime,' Gerochi in a news statement said.