Consumers Domain
Wowowee, poverty & VAT
"I'm on an island at a busy intersection
I can't go forward, I can't turn back..."
- from "One Step Closer" by U2
At least 88 people killed and more than 300 injured. Would you like to guess on what is common among them and the more than 30,000 others who lined up, crowded and waited to enter the Ultra Stadium in Pasig to watch Wowowee?
The answer is--all of them belong to the poor marginalized segment of the population (of which they are the majority). Nothing can best explain this better than the remarks of Merquieades Salazar, 45, who lost his wife in the stampede. The jobless couple wanted to enter, watch the program and have a chance to win cash prizes that will be raffled off. Salazar, while weeping beside his wife's dead body, said, "In the desire to win money, she is the one I lost."
This is indeed very painful. What has driven these people to attend the game show is not simply to see their favorite stars. But more so, to win cash prizes that could answer for their daily needs, even for just the short term. Many of them even camped out around the stadium a day before the event just so they could be one of those who can be at the head of the line - thus to ensure that they get hold of that slim chance to win the raffle.
What has happened is another face of poverty. It's another appalling tragedy that describes the desperate-ness of the poor Filipinos suffering from the clutches of poverty. This is by no means similar to the picture of a family scavenging the garbage dump for food and other scraps that could be sold or converted to cash.
With this, I recall a recent survey made by the Social Weather Stations. It showed that nearly 17 out of 100 Filipinos went hungry at least once in the fourth quarter of 2005. Further 57% of those surveyed also described themselves as poor, up by 8 percentage points from 49% in the previous quarter.
This is the state of poverty in the country and we don't actually need statistics and survey results to know this. We are all witness to this distressing plight of our people. And sadly, we don't see any glimmer of hope in the very near future.
With the way politics and governance in the country is going, we don't think the real needs of the population will be genuinely addressed. And with the way the economy is going, despite the pronouncements of the government about rosy economic numbers, we don't think such empty figures can lift up the burden of poverty from the poor.
This brings me to another round of increase in taxes courtesy of the Reformed Value-Added Tax or now called R-VAT. November last year, the coverage of VAT on goods and services was expanded to those previously exempted such as power, air and sea transport, etc with the implementation of the Republic Act 9337, otherwise known as the VAT Reform Act. Then, starting this month the VAT will be increased from 10% to 12% by our dear economist non-President Gloria Arroyo.
Contrary to the government's declaration, this R-VAT will surely result to increases in prices of basic commodities and services, especially power, water and food products. And it will again be the poor who will be hardly hit by this - those same people who lined up in Ultra Stadium!
A VAT is an indirect tax and it does not distinguish if you are rich or poor. It does not differentiate one who has the capacity to pay a hundred fold more to the other who can barely survive. A kilo of rice purchased by a pauper will be taxed 12%, the same tax to be levied from the kilo of rice bought by a landlord.
What is more appalling is that 70% of incremental tax collection brought in by R-VAT is earmark for the payment of the country's debts! Seventy percent of the P75 billion target collection will only be used to pay for debts - a big part of which was acquired fraudulently or anomalously!
If only Wowowee can raffle off the country's debts among all the trapos who have bilked the government's coffers dry.
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