VAT figures worlds apart

Senate President Franklin Drilon is a team player. So as soon as he bangs the gavel to open today’s special session, he will exhort the senators to pass Malacañang’s value-added tax. After all, majority of them from both the administration and opposition believe it necessary to lick the fiscal crisis. Problem is, will the Senate version jibe with that of the House of Representatives to end the session by Friday with a tax that can live up to reve nue expectations?

To be sure, the Senate bill as sponsored by economic committee chair Ralph Recto is worlds apart from the House’s. The latter earlier passed two separate VAT bills: one upping the rate to 12 percent from the present 10, the other lifting exemptions on two dozen or so items. Recto’s bill, aside from retaining the 10-percent rate, rolls in the exemptions as well. This has raised a constitutional question on whether the Senate can pass its own tax measure when it is the House that has sole authority to do so. Rep. Teodoro Locsin had opined in a privilege speech that all the Senate can do is respect or reject the House bills, never combine or much more revise them.

Even if the two chambers find middle ground to resolve the turf row, there’s still the issue of the senators agreeing on the numbers. For, as things stand, their own revenue assumptions are worlds apart as well.

Malacañang’s scheme, presented by the Finance department for a 12-percent rate, targets annual takes of P89.2 billion at 100-percent collection efficiency. Sen. Juan Ponce Enrile says the government will raise close to that, P86.8 billion, even if the Senate stands pat on 10 percent. Recto sees a much lower P51.6 billion at such rate and efficient grade.

The taxman can’t be that good, though. So Finance falls back on a more realistic 70-percent collection efficiency, in which case it targets P62.5 billion a year. Still, Enrile’s computations are close at P60.8 billion, while Recto’s drops to only P36.1 billion.

In hearings, Recto recalculated Finance’s own assumptions at 12-percent VAT rate and 100-percent collection efficiency, and insisted the government will get P71.2 billion a year. Under his proposed 10 percent, it will still be P65.1 billion. If under a realistic 70-percent efficiency, the government will make P49.8 billion using the officials’ assumptions at 12 percent, and P45.6 billion at his 10 percent.

Revenue assumptions from lifted exemptions vary widely too. From a 12-percent VAT on electricity, for instance, Finance foresees additional take of P800 million a year. Recto calculates a whopping P15 billion even at only 10-percent VAT if power producers and distributors start paying. From petroleum, Finance anticipates P12.3 billion at 12-percent VAT; Recto awaits a heftier P13.6 billion even at only 10 percent once oilmen start paying as well.

Why do assumptions vary so vastly? Perhaps it has to do with basic mistrust in official reports and statistics. It’s the stuff that somehow led to fiscal crisis in the first place.

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Last Mar. 9, citing letters of Haydee Carlos and Jojo Dancel, I wrote about the long lines to renew overseas employment certificates. Many more OFWs shared sad experiences wasting precious vacation time at the Phil. Overseas Employment Administration. POEA chief Rosalinda Dimapilis-Baldoz responds to them. Excerpts:

"The suggestion for one-time issuance of OECs or electronic receipts, valid for several exits in one year, is under study. Issuance of travel exit clearance is now automated. E-receipts are issued for travel in lieu of OECs, except in our regional, overseas and satellite units, but they will soon be electronically connected to our system. The present OEC/e-receipt serves as basis for exemption from travel tax and airport fee, and discounts for dependents. We are talking with tourism and airport authorities because a one-time issuance will require changes in their accounting procedures.

"In June 2004 we implemented card-swiping at the Balik-Manggagawa Processing Center, POEA Main Building, and the Labor Assistance Office, NAIA, using the OFW electronic identification card (e-card) as a first step in facilitating procedures. However, we are still updating our database and installing electronic links with overseas and regional offices to complete our system. The permanent ID e-card is issued free by the OWWA and POEA. Its other uses are: as ID to avail of OWWA life/accident insurance, disability, burial, education, training benefits, and on-site assistance for remittance.

"We are coordinating with several banks to act as satellite stations. OECs/e-cards are issued not only at the POEA main office. OFWs who are returning to the same employer may get their exit certificate at labor offices in jobsites, POEA extension units and OWWA regional offices, Duty-Free Fiesta Mall and designated shopping malls during peak seasons. Information is posted at our website: www.poea.gov.ph under Registration of Workers-on-Leave. (Ms. Carlos, she can get her OEC in Singapore where she is employed before coming home so she can enjoy her short vacation, and so with Mr. Dancel.)

"We have an Express Delivery Courier System for returning workers who want their documents delivered to them at the doorstep, for a flat rate of P220 to any location in the Philippines. Our NAIA Labor Assistance Center also issues OECs to domestic helpers accompanying employers who stayed in RP for only a week, workers on emergency leave for a few days whose arrival or departure falls on weekends, those with expiring visas or who vacation every other month or more frequent. We only have long lines there whenever we have technical difficulties.

"Our NAIA staff ensures that OFWs are properly documented before flying to jobsites to avoid deportation due to deficient requirements."

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