Leviste slams Recto for opposing reduced VAT

Neophyte lawmaker Leandro Leviste of Batangas on Monday called out Executive Secretary Ralph Recto over the latter’s opposition to Leviste’s proposal to reduce the Value Added Tax (VAT) rate from 12% to 10%.

Leviste joined some 3,000 protesters at Batasang Pambansa on Monday who called for the removal of excise tax and VAT on fuel amid the exponential oil price hikes caused by the US-Israel-Iran war in the Middle East.

“There’s a position paper signed by then-Secretary of Finance Recto opposing a decrease in the VAT from 12% to 10% as this would lead to substantial revenue losses,” Leviste, the author of House Bill 4302 which provides this reduction, said.

“Congress has yet to schedule a vote on lowering the VAT because of the continuing opposition of now Executive Secretary Recto, who also authored the law that raised the VAT from 10% to 12%,” he added.

In October, when he was still head of the DOF, Recto said that proposals to reduce the VAT “might lead to massive revenue losses, resulting in less public services, and may force the government to borrow even for basic operations, such as personnel salaries."

In the same statement in October, Recto said that the P576 billion in total excise tax collections is not enough fund the required  P965-billion budget for basic, tertiary, and technical-vocational education programs of the government.

Leviste, however, insisted that reduced VAT rate is what the public urgently needs to alleviate their plight.

“Why is Congress allowing the Cabinet to block a vote on the VAT? My constituents here from Batangas represent the millions of Filipinos who are paying higher prices because of the VAT yet have not received any ayuda—I hope the government will find the sense of urgency to lower the VAT on all goods and immediately suspend the VAT on oil,” he said. “Suspending the fuel excise tax is not enough.”

Also on Monday, Finance Undersecretary Rolando Ligon, Jr. said there is no timeline yet for the implementation of the law allowing President Ferdinand "Bongbong" Marcos, Jr. to suspend or reduce excise tax on fuel amid surges in oil prices.

“We're still awaiting the instructions from the Office of the President with regards the lifting of the excise tax. If the Office of the President releases it today, the effectivity will be one to two days,” Ligon told the House’s Legislative Energy Action and Development Committee.

The law allowing Marcos to suspend or reduce excise tax on fuel was signed on March 25.

There has been an exponential surge in oil prices since a US-Israel joint operation launched airstrikes on Iran last February, prompting Iran to retaliate by firing missiles at other oil-rich Middle East countries where the Philippines sources 98% of its crude oil supply.

Since then, Iran restricted access to Strait of Hormuz, a major passageway for oil supply worldwide.

As a result, fuel prices have surpassed P100 per liter for the last two weeks, burdening sectors across the board but especially the public transport sector. — BM, GMA News