Congress told to amend law if it feels tax on fuel is too high

MANILA, Philippines—A Malacañang Palace aide said Saturday Congress should amend the law if its members feel the 12-percent value added tax on petroleum products is too high.

Abigail Valte, one of President Benigno Aquino’s official spokespersons, made the statement in reaction to calls by some legislators for the suspension of the tax on petroleum products in the face of spiralling prices of petroleum.

Valte said that decreasing the VAT rate or altogether doing away with the VAT on oil would have a negative impact on the government’s budget for basic services and other programs for the public.

“If they really feel strongly that 12 percent is too high, or they think that there should be a suspension, then the best place to start it would be in Congress or in the Senate,” Valte said over state-run radio dzRB.

But a militant organization, saying that Valte did not know what she was talking about, disclosed that several such bills had already been filed and were collecting dust in Congress.

“You cannot just remove VAT on oil and act as if it is in a vacuum,” Valte said, justifying the government’s continued collection of the 12-percent VAT on oil despite the continuous increase in the prices of petroleum products.

Valte said that if a funding source was removed, certain government programs would lose funds. “It’s not as if we decide to remove it and that is already the end of the line,” Valte said.

Reacting to Valte’s remarks, the militant Bagong Alyansang Makabayan said bills were already pending in Congress seeking the removal of the VAT on oil products.

“Ms. Valte appears clueless to the fact that there are pending bills on the VAT on oil and even the oil deregulation law now gathering dust in Congress,” said Bayan secretary-general Renato Reyes, Jr., in a statement.

“The problem is not the lack of legislation but the utter lack of political will and sense of urgency on the part of the Aquino government,” he added.

Bayan’s allied partylist group Bayan Muna has filed HB 2719 calling for the repeal of the VAT on oil.

Reyes said there were at least six pending bills related to the review and repeal of the oil deregulation law filed before the House Committee on Energy but not a single hearing had been set.

The committee is chaired by Liberal Party lawmaker Batanes Rep. Dina Abad,  wife of Budget Secretary Florencio Abad and an ally of President Aquino.