TAÑADA PROPOSES A 50-50 SHARING SCHEME:

TAÑADA PROPOSES A 50-50 SHARING SCHEME:
“SUSPEND VAT ON OIL PRODUCTS FOR HALF A YEAR, LEGISLATORS FOREGO HALF OF THEIR PORK BARREL FOR 2008”
 
In trying to further mitigate the impact of rising oil prices on our people, Representative Lorenzo “Erin” R. Tañada III (Liberal Party, 4th District, Quezon) asserts that government’s fiscal position will not be adversely affected should a half-year suspension of the VAT on oil products be implemented.
 
“The foregone revenue, if I take government’s submitted ‘Budget of Expenditures and Sources of Financing’  document to Congress at the start of the budget deliberations as the real deal, rather than the Department of Finance’s press release, then the loss is merely around P20 billion for 2008 and not P54 billion as Secretary Teves claims,” Tañada said.
 
If simple averaging isused, suspending it for half a year would result in a revenue loss of about P10 billion.  Cutting by half the legislators’ pork barrel yields P9.79 billion, approximating the foregone revenue from half-a year’s suspension of VAT on oil products.
 
“What would be nicer though is if our senators would be magnanimous enough to totally forego their pork barrel for the entire year.  The additional P2.3 billion fund can be used as start up fund for an Oil Price Stabilization Fund.  Of course its mechanics should be well thought out and we have plenty of lessons learned when we had the OPSF before.  The old practice of using the OPSF to ensure that oil companies maintain their profits rather that really stabilize prices should never happen again.  The beauty of having a stabilization fund is that the public can have access to oil companies’ financial records and operations – something which was lost when we deregulated the oil industry.  That way, we can actually detect cartel-like behavior among them,” Tañada proposed.
 

“Of course, I do realize that we need an enabling law passed by Congress to be able to put this into effect.  That is a real challenge to the 14th Congress but by doing so, it somehow shows their sincerity to mitigate the negative effect of the high oil prices that our people are now burdened with for it is a strong signal that they are willing to make do with half of the pork barrel they are expected to get for their districts,” he ended.

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