Concepcion urges 6-month delay for EVAT hike to 12%

Industrialist and consumer advocate Raul T. Concepcion urged yesterday government authorities to defer for six months to July next year the increase in the expanded value-added tax (EVAT) from 10 percent to 12 percent.

In a press conference, Concepcion said postponing the implementation of the 12-percent VAT will allow government more time to assess the impact of the wider 10-percent VAT coverage absorbed by the consumers.

"I will try to talk to the authorities to work out a way to let the people have some kind of reprieve from high prices. We should let the consumers breathe first from the impact of the 10- percent EVAT," he said.

Concepcion, chairman of the Consumer Oil and Price Watch (COPW), said the full impact of EVAT could be assessed only by January next year, after which the government would be able to also review the possibility of adjusting wages.

"There would be a breathing space for consumers. They have been though a lot of pressures lately because of high prices," he added.

He said various government agencies like the Bureau of Internal Revenue (BIR) will also need more time to issue the appropriate guidelines for the 10-percent VAT. "The BIR has yet to thresh out the rules for the VAT."

The government started implementing the 10-percent EVAT through Republic Act 9337 starting November this year. The tax now covers petroleum products and electricity which were previously exempted from this kind of taxation.

RA 9337 gives Malacañang the prerogative to raise the tax rate to 12 percent by January next year from the current 10 percent. It is seen to boost government revenues by at least P82.5 billion next year.

In another development, Concepcion said oil prices would likely hold steady for the remainder of the year.

"Crude oil prices have been going down for the past few days. Most likely pump prices would remain the same," he said.

Concepcion said he is optimistic prices of crude and finished products will continue to go down this year. Oil companies have recently rolled back the prices of their pump products due to the softening of oil prices in the international market. If this trend continues, the oil firms said they would have another price rollback this month.

But Concepcion has a different view. "Chances are prices will not go up or down for the remaining days of the year. In case prices will go down in the international market, the supposed rollback will just absorb the impact of the 10-percent VAT," he said.

At the same time, the consumer advocate said he would also try to convince the heads of the Department of Trade and Industry (DTI) and Department of Energy (DOE) to study ways to lessen the impact of higher prices of diesel and liquefied petroleum gas (LPG) or cooking gas – both socially-sensitive products – to consumers.

"Maybe we can work out something like a diesel and LPG price discounts for a certain sector of the society. We can give certain discount to an 11-kg LPG," he said.

He said he would convince Energy Secretary Raphael Lotilla to adopt a "special pricing" scheme in the metropolitan areas.

"We could also give special prices for those fishermen using diesel for their boats," he added.

Based on DOE data, diesel will only increase by 22 centavos per liter instead of 88 centavos as originally estimated. Kerosene will increase by P1.40 per liter instead of P2.06 while unleaded gasoline will rise by P2.37 per liter instead of P3.03 per liter.

The 11-kg LPG tank will increase by P22.17 instead of P35.37.

But Concepcion pointed out that these are all just proposals and would need to be studied by both the COPW and the government.

Another proposal to ease the impact of the 10-percent EVAT, he added, is the expansion of Manila Electric Co.’s lifeline discount to 200 kilowatthour (kwh) from the current 100 kWh.

In the Meralco franchise area, the average increase per kilowatthour will be 60 centavos per kWh.

For those under the lifeline or discounted rate, those consuming 0-50 kwh will pay only an additional P13.75 a month; 51-75 kwh, P25.75 a month; 76-100 kwh, P46 a month; 101-200 kWh P118.44 a month; 201-300 kwh, P185.66 a month; 301-400 kwh, P257.73 a month; and 401-500 kwh, P344.51 a month.