Gov’t won’t scrap VAT on oil

MANILA, Philippines – Scrapping the value-added tax (VAT) on oil is not in the menu of options the government is considering to ease oil price spikes.

“Removing the VAT on oil as suggested by PISTON [Pinagkaisang Samahan ng Tsuper at Operator Nationwide] is not being considered,” Deputy Presidential Spokesperson Abigail Valte said in a text message to reporters on Tuesday, February 21.

The public transport group has threatened to go on strike to dramatize their protest against rising oil prices.

Imposing VAT on oil was part of the state revenue strategies in 2005, when the government was faced with a looming fiscal crisis.

President Aquino has been adamant about letting market forces take its course as interventions tend to be costly.

However, there is an ongoing fuel subsidy program called Pantawid Pasada wherein almost 100,000 public utility drivers receive prepaid cards that are loaded with the government’s cash subsidy.    

Recently, President Aquino ordered that these cards are reloaded with P1,200 each to provide relief as pump prices spike again.  

Malacanang also said that concerned government agencies are in discussions with public transport cooperatives and manufacturers of vehicle spare parts and accessories for possible dealers’ discount and tax-exemption schemes. – Rappler.com