Press Release
April 2, 2013

Cayetano Reiterates Call to Decrease VAT on Oil
Go After Smugglers Instead

Senator Alan Cayetano in a statement today said that an investigation on the revelation by Petron Corporation chairman and chief executive officer Ramon S. Ang about oil smuggling must be made a top priority as this may be the primary reason for high prices in the country.

Ang revealed that about one in every three liters of gasoline or diesel sold in the country is smuggled, resulting in a revenue loss of P30 to P40 billion a year, and a corresponding increase in oil prices.

"This is exactly why in the budget hearing two years ago, I advocated the purchase of more equipment and ships for our Coast Guard. Initially, P300 million to equip our Coast Guard seems like a large amount, but if you compute this against how much losses we would turn into revenues for the industry instead, which is approximately P30 Billion, you can see that it's a good investment to make for the country," Cayetano explained.

Cayetano also lauded Ang for his revelations. "We need more businessmen speaking out against situations like this because it is helpful for the government," the senator said.

High Prices

"This is an issue that must be at the top of the priority list of the administration because it goes to the heart of one of the biggest concerns of Filipinos: high prices," Cayetano explained. Ang earlier said that the resulting loss due to smuggling of oil has a devastating effect on the Philippine economy as it drives up the prices of not only petroleum products but also of basic commodities.

Cayetano recalled the plight of the transportation sector that he was able to talk to during one of his Listening Tour stops in Dagupan, Pangasinan. "They revealed to me that they are losing more than half of their day's earnings just to pay for gas and boundary charges leaving them with just a few hundred pesos to take home," he said.

Reduce VAT on Oil

Cayetano reiterated his call to reduce the application of value-added tax (VAT) on oil. He explained that reducing the VAT on oil will be an effective tool in ensuring that prices of commodities as a whole are driven down - an event that will truly benefit every Filipino family. "When the price of oil goes down, transportation cost will too. When transportation cost goes down, the prices of commodities will too," he said.

Curb Smuggling

Cayetano also stressed that the government must increase its policing strategies to prevent smuggling from further burdening the rest of the country.

Cayetano is running under a platform aimed at addressing issues related to PTK: Presyo, Trabaho, Kita. He is currently conducting a PTK Listening Tour - series of discussions with various sectors of Philippine society. He will be talking to the student leaders Laguna Polytechnic University and Batangas State University as well as the fisherfolk of San Pedro, Laguna tomorrow.

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