PRESS STATEMENT
MBC urges smooth implementation of E-VAT,
Oil Deregulation, and Comprehensive Tax Reform Program
17 January 1996 - The Makati Business
Club urges the smooth implementation of the E-VAT, Oil
Deregulation Bill, and the Comprehensive Tax Reform
Package.
The E-VAT should continue to be implemented
and its guidelines released and clearly explained to
the public so that people will know which items are
subject to the E-VAT. For example, it should be clearly
pointed out that such rules as E-VAT on rentals apply
only to leases of over P12,500 per month and that various
taxes on such items as food and beverage bills have
been replaced by the new E-VAT.
However, we also note the difficulty of
administering the E-VAT on hauling and transport (including
public transport and taxis) and its inflationary effect
on the economy. This portion, therefore, should be considered
for amendment.
Regarding oil deregulation, we feel that
the government should pursue this policy since consumers
will benefit from improved services and competitive
pricing. In 1995, the MBC outlined a multi-step procedure
for liberalizing the industry. We continue to stand
by this recommendation. Moreover, we feel that a tariff
differential should exist between crude oil imports
and refined product imports. However, we feel that such
a differential should be determined periodically by
the Tariff Commission after the appropriate tariff hearings
have been conducted.
Finally, regarding the Comprehensive Tax
Reform Package, we feel that such a package should be
passed into law in its entirely as a package and not
as a series of legislation. We support the moves to
raise deductions for individuals and to simplify and
reduce the number of tax rates for individuals. For
corporate tax, we suggest that companies be given an
option, to be exercised only once every three to five
years, to choose between a Gross Income Tax and a Modified
Gross Income Tax. The overall principle of the tax program
should be to increase the tax base and to ensure that
taxes are collected equitably and efficiently from all
eligible taxpayers.
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