Tuesday, 27 May 2008

For every P1 per liter oil price hike: Government earns additional P5.5 M daily in VAT revenues

Reference: Arnold Padilla, spokesperson (0926-6246061)

For every P1 per liter oil price hike, the national government collects an additional P5.47 million in revenues everyday from the value added tax (VAT) imposed on petroleum products, the Kontra KulimVAT revealed today.

Kontra-KulimVAT, a consumer campaign launched to scrap the 12% VAT on oil and electricity to lower their rates, said that most of these additional revenues come from diesel which generates P2.12 million daily in extra VAT collections for every P1 per liter oil price increase.

“This explains why the government continues to ignore the clamor to scrap the oil VAT. But it is unconscionable that MalacaƱang reaps windfalls from the economic hardship of our people,” said Arnold Padilla, Kontra-KulimVAT spokesperson.

Padilla added that aside from diesel, the government also earns P1.21 million more daily in revenues for every P1 per liter increase in the price of gasoline; kerosene, P0.54 million; fuel oil, P0.96 million; liquefied petroleum gas (LPG), P0.61 million; and other petroleum products, P0.04 million.

“The government always pins the blame on the world market for the high oil prices but it is actually just an excuse to justify its self-imposed helplessness. The VAT on petroleum is a national policy and clearly, the government can choose not to implement it for the interest of the consumers,” Padilla pointed out.

He said that pump prices of various petroleum products can go down by P5 to 6 per liter if the VAT is removed.

Groups under the Kontra-KulimVAT campaign have been gathering signatures since last week asking for public support to cancel the VAT on oil and electricity. They will submit the signatures to the House of Representatives where bills for the removal of VAT on oil and power are pending. #

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