IBON Foundation, Inc.
The administration’s “Katas ng VAT” is a pretense to cover up how the largest part of reformed value-added tax (RVAT) revenues do not go to social programs but rather to paying off debt, militarism and political patronage to prop up Pres. Gloria Arroyoâ€
The so-called pro-poor subsidies also do not mean any lasting effect for the people who suffer record joblessness, rising prices and worsening poverty.
The government deceitfully lumps together the share of social services with infrastructure in RVAT revenues when it reports on the share going to social programs to make these appear larger than the reality. The government claims that 40% of RVAT revenues in 2008 will go to â€œsocial services and infrastructureâ€ but it is still unclear how much will really go to social programs.
For instance the Department of Finance said that, in 2006, â€œ30% or P23.5 billion (of additional RVAT revenues) went to social and infrastructure expendituresâ€. However the actual amount that went to social services was just P8.4 billion: health programs (P2.7 B), resettlement and housing programs (P2 B), educational & training programs (P1.9 B), hunger mitigation programs (P1.8 B). This means that only 11% of additional revenues from RVAT went to social programs.
Indeed, the administration has yet to fully explain where its massive windfall RVAT revenues are going which can only stoke suspicions that this is going to corruption and building a political war-chest for the 2010 elections or even a renewed Cha-Cha campaign.
In contrast the administration still insists, in the face of the peopleâ€
The Arroyo government is running out of excuses to justify the continued imposition of the VAT on socially sensitive products such as oil. Pres. Arroyo has to heed to the peopleâ€
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.