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Truth and Lies about EVAT

January 28th, 2006

While everyone are still in high spirits about Pacman’s victory and coup rumors are constantly being fed to the public mind, nobody seemed to notice about a looming plague that will soon hit our country. The EVAT is going to be fully implemented on February.

I’m posting here an email I got about the truths and lies of EVAT which I completely agree. Here goes;

LIE: Revenues from EVAT will be used to fund social services and public infrastructure.

TRUTH: Proceeds from EVAT will be wasted on servicing of debt including illegitimate and onerous ones such as the Bataan nuke plant and IPP contracts. Debt payments gobble up 70 centavos of every peso of the proposed budget this year and a staggering 80 cents of every peso of tax collected last year. Of what little remains, massive corruption will take a large piece and crumbs are all that will be left for government services.

LIE: The EVAT is not anti-poor.

TRUTH: Government propaganda highlights that families spending not more than P60,000 per year will only pay 0.2% of that on taxes like EVAT. But who are these? These are the hungry poor that spend a mere P28 per day. They will hardly pay for EVAT but only because they hardly spend or eat at all! Instead the average working class family will spend an additional P428 per month due to EVAT on electricity, LPG and food. This is more than a day’s wage lost by workers to EVAT.

LIE: The EVAT is progressive because it is a consumption tax and therefore the rich who consume more VATable goods and services will pay more.

TRUTH: Consumption tax is regressive by nature. The poor may consume less in nominal terms compared to the rich, but a higher percentage of their lesser income is spent on consumption. Thus EVAT in fact imposes a heavier burden on the poor than the rich. It is a Robin Hood in reverse, taking from the poor and giving to the rich bankers and debtors. Regressive taxes like VAT are raised to make up for the billions in revenues lost due to rapid reduction of tariffs and generous tax holidays for investors. Thru EVAT, poor Filipinos are in fact subsidizing not just the rich but also the giant multinational companies!

Think about it!

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  1. February 2nd, 2006 at 14:48 | #1

    ‘poor Filipinos are in fact subsidizing not just the rich but also the giant multinational companies’

    as always…

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