BARRING a reconsideration of the Supreme Court’s decision to uphold the constitutionality of the Expanded Value Added Tax Law of 2005 (Republic Act No. 9337), the President will now have the power to increase the VAT rates up to 12 per cent come January.
According to newspaper accounts, the government hopes to raise an additional P86 billion in revenue with the EVAT law for its projects and hopefully cut the budget deficit.
Before, I was hopeful that the measure would not be enacted because I simply did not want the prices of basic commodities, like food and clothing, to increase especially at this time when every centavo in my pocket counts. Plus, given the peso’s falling purchasing power, basic economics dictate that your P100 bill at the moment will get you less the time the higher tax rate is applied.
Nevertheless, I’m not about to question the wisdom behind the passage of the law. If it means higher prices of goods in order to achieve economic development at the end of the day, so be it. And as the Supreme Court has time and again declared, taxes are the lifeblood of the government and their prompt and certain availability is an imperious need.
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For me, the question is not really whether the people can cope with the effects of higher VAT rates. Rather, it is whether the government’s tax collectors will faithfully deposit to the national coffers the money that rightfully belongs to Caesar.
Around two years ago, a lifestyle check on top government officials revealed that some Bureau of Internal Revenue people are living beyond their means, amassing assets inconsistent with their supposed annual income.
Aside from them, there are surely other tax collectors who have cheated the national treasury yet to be uncovered.
Because of these crooks, the government loses billions of pesos in revenue yearly. The stashed amount could have been used to pay the country’s ballooning debt and to fund projects for the general welfare.
I’m not losing hope that one day our tax collection agencies will be rid of a substantial number, if not all, of dishonest collectors. With efficient and honest tax collectors, the government will not have to resort to the enactment of more tax laws to raise additional revenue.
