Press Release
December 20, 2007


Senator Mar Roxas chided the Department of Finance for nixing the idea of a temporary suspension on the collection of EVAT on oil without careful study and public consultations on how such a move can affect the country's fiscal outlook and improve the people's financial conditions.

The senator said that a moratorium on the collection of EVAT on oil is the best pro-poor policy that government can immediately set in motion. "Ang bilis nilang mag-reject ng proposal para direktang tulungan ang mga mahihirap lalung lalo na ngayong Pasko. Sana man lang pag-isipan nila dahil napakalaking ginhawa ang mabibigay nito sa lahat ng Pilipino," Senator Roxas lamented.

He noted that government has failed so far to inspect the books of oil companies to ensure a fair price on gasoline and oil including LPG. "My advocacy is for a national consensus to suspend the 12% EVAT on oil and petroleum products for a period of six months just to give the Filipino consumer a break from paying so much taxes at a time of skyrocketing oil prices," Roxas added.

Roxas said he will fight for his proposal and is prepared to debate with any member of the President's economic team on the urgency and legitimacy of his proposal. "The finance department is too enamored with its target of a zero budget deficit that it could not even see or sense how many households are on the brink of bankruptcy," Roxas said.

He cited the number of OFW families who acquired loans for appliances, education, and housing but may have difficulty in meeting monthly amortizations due to a strong peso. He also underscored the complaints of the transport sector on how the high price of oil is eating into their daily profits.

"EVAT on oil contributes about P40 billion yearly. A six-month suspension would have a revenue impact of about P20 billion. Let's compare this to revenue losses due to rampant oil smuggling and corruption. Why should people be made to pay such a high price when government cannot reduce its own inefficiencies in tax collection?"

The chart below compares oil prices per liter in December '06 and December '07:

As of December 9, 2007                            P per Liter                                     Increase
                                                        Dec '06     Dec '07                              Diff             %

Unleaded Gasoline                             37.25           44.45                             7.20           19.3
Diesel                                               33.25           38.45                             5.20           15.6
Kerosene                                          34.79           39.99                             5.20           14.9
LPG                                                  23.59           30.64                             7.05           29.9
Industrial Fuel Oil                              21.45           29.66                             8.21           38.3

Source: Department of Energy

Back when the VAT was being discussed, world crude oil price was only at about $50 per barrel. Today, world crude oil price has reached $90 per barrel. "Even on that basis alone, government should have been actively consulting different sectors on how to cope with this oil price increases," Roxas said.

The chart below provides consumers an idea of how much savings will redound to their wallets once the 12% EVAT on Oil is suspended:

As of December 9, 2007                           P per Liter                    VAT (12%)

Unleaded Gasoline                                     44.45                             4.76
Diesel                                                       38.45                             4.12
Kerosene                                                  39.99                             4.29
LPG (/kg)                                                  54.81                             5.87

Source: Department of Energy

"Government believes it should keep on collecting EVAT on oil and be the sole arbiter on how these revenues should be reallocated. I say, let's give our people a break this Christmas and for the coming months. These savings on oil will be used to consume other products and services as well that we all pay EVAT for. Meanwhile, we give the people instantaneous relief from high prices and meager incomes," Roxas stressed.

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