article in manila times

hi guys

interesting article in the Manila Times 6/9/05

Govt to cut tariffs on petroleum products

THE government will cut import tariffs on petroleum products to ease the impact of the expanded value-added tax law and rising oil prices, an official of the National Economic and Development Authority recently said.

Dennis Arroyo, NEDA’s National Planning and Policy Staff director, said the government has readied mitigating measures to lessen the impact of the law that the Supreme Court suspended on July 1 and approved for implementation August 31.

“Among these [measures] are the reduction in import tariff on petroleum products from 5 percent to 3 percent while tariff [of liquefied petroleum gas] remains at zero,” Arroyo said.

“This is expected to reduce the price impact by as much as P0.50 a liter,” he added.

Arroyo said the government will also pursue the removal of excise taxes on diesel, kerosene and bunker fuel oil. This move, according to NEDA, may reduce the impact on diesel prices by as much as P1.63 a liter.

The sale of power by nonoil generating plants like geother­mal, hydro, and solar has also been zero-rated.

“This effectively reduces the cost of electricity and encourages the use of renewable energy sources,” Arroyo said.

Socioeconomic Planning Secretary Augusto B. Santos is banking on the new VAT law as government’s centerpiece revenue measure.

“While it is not a panacea to our fiscal woes, it is a vital measure to boost revenues and to correct weaknesses in the tax system. The social benefits from the VAT far outweigh the pain of higher prices,” he said.

The planning chief noted that the government badly needs the money in the years ahead to support its social priorities.

“We need funds to upgrade the education of our children, to expand the reach of our health care system, to provide roads and irrigation for our farmers, to construct mass housing, to give decent pay to our government workers,” he added
--Darwin G. Amojelar