‘Flexi VAT’ and supply woes
| C.R.O.S.S.R.O.A.D.S |
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| Jonathan De la Cruz |
Now that P-Noy has somewhat eased on his erstwhile aversion to tweaking the oil deregulation law and its attendant operating framework by signing on to the Philippine National Oil Co.-Exploration Corp. (PNOC-EC)’s diesel reserve project, he and his advisers may do well to go a step further and consider the “flexi VAT” suggestion of noted economist Ben Diokno, who is a UP professor and former President Erap Estrada’s Budget secretary. He has suggested that Malacañang advise Congress to pass as an urgent administration measure a flexible VAT in lieu of the current rigid across-the-board VAT system on oil and oil products. Under this proposal, Congress and the administration can agree on a maximum price upon which the flexible VAT system will be imposed.
They can agree, for example, that the flexibility only applies to a fixed maximum price of say, $100 per barrel. If the price goes higher than that then the VAT will only be applied on the fixed ceiling of $100 per barrel not the higher one. This flexi VAT proposal takes off from the flexi tariff initiative which the previous administration put in place when oil prices hiked unexpectedly earning it plaudits from a suffering public..... MORE
Source: The Daily Tribune
URL: http://www.tribuneonline.org/commentary/20110420com4.html
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