Opposition hits back at benefits package
OPPOSITION DISY yesterday trashed the government’s benefits package, saying most of it was made up of tax returns masquerading as assistance.
On Friday, President Tassos Papadopoulos personally announced measures to the tune of £102 million, over and above an earlier £17 million energy packet aimed at alleviating consumers from rising fuel prices.
The government said the £102 million targets specific groups such as pensioners, the handicapped, those drawing unemployment benefits, large families and farmers. Flanked by his ministers of Finance and Commerce, Papadopoulos insisted the money would not put a dent in state finances.
The administration aims to slash the public deficit to three per cent of GDP by the end of the year, with a view to joining the eurozone.
The new measures would give a £75 boost to pensioners receiving under £225 a month, irrespective of whether they benefited from the earlier energy packet.
What is the value added in VAT?
Before we delve into the question of value added tax let us understand a few useful terminologies. We know that the economic system exists to provide food, clothes, shelter and other things we require to satisfy our needs and wants. This power or characteristic of satisfying a want is called utility. People have strategies for obtaining their utilities. One of the elements that enter into formulating a strategy is value — the quality of something being useful or desirable.
What then is value added? It is the act or process by which tangible product features or intangible service attributes are bundled, combined or packaged with other features and attributes to create a competitive advantage, reposition a product or increase sales. The essence of “value” is embedded in the trade-off between the benefits a customer receives from a new product and the price a customer pays for it.
As a product moves from raw material to finished good, value is added at each step in the manufacturing and delivery process. This forms a value chain which indicates the relative amount of value added at each of these steps.
Value added therefore refers to the additional value created at a particular stage of production. Take this imaginary situation. You are in Garissa and you want to place a plate of ugali on your table. You go to the shop to buy unga with which to cook the ugali you want.
10/23/2005
Despite political crisis, economy growing
Despite the adverse political situation, President Arroyo expressed optimism yesterday that the economy will continue to grow, especially with the implementation of the expanded value-added tax (EVAT) law starting Nov. 1.
“As we are poised for the expanded VAT implementation with strong safety nets, global confidence in the Philippines is resurgent,” she said in a statement after meeting her economic advisers at Malacañang.
“Our economy continues to look up because this government is closely and consistently focused on it,” said the President, whom the opposition has been trying to unseat for the past five months on charges of election fraud.
Brushing off fears that the EVAT law would raise inflation and hit the poor the hardest, Mrs. Arroyo said the Supreme Court go-ahead for the EVAT last Tuesday, paving the way for full implementation on Nov. 1, has boosted investor confidence.
The expanded VAT is the centerpiece of the government’s campaign to control the budget deficit and forestall a looming fiscal crisis, but even Mrs. Arroyo’s allies worry that it may worsen inflation at a time when dissatisfaction with her administration remains strong.
Mrs. Arroyo said the country was “on the threshold of economic takeoff” if it could sustain the interest of foreign investors and creditors who have been encouraged by key reforms such as the expanded VAT and opening of the mining industry.
International credit rating agencies had previously downgraded the Philippines’ international credit outlook due to the failure to implement the expanded VAT.
However, analysts say the Philippines must actually implement the controversial tax measure, which faces legal challenges from opposition and leftist groups, before rating agencies will consider an upgrade.
Lawyers urge Congress to amend eVAT Law
Cebu lawyers are urging Congress to amend the controversial Expanded Value Added Tax Law so that it will not greatly affect the poor people.
The officials of the Integrated Bar of the Philippines Cebu City Chapter headed by Alex Tolentino, however, did not specify in their resolution what particular provisions of Republic Act 9337 or the eVAT Law are to be amended. The law is set to be implemented on November 1.
It was former IBP-Cebu City Chapter president Democrito Barcenas who encouraged his fellow lawyers to pass a resolution asking the congressmen to review the controversial eVAT and to make amendments.
Tolentino said over dyLA yesterday that there is a big possibility that the lawyers will also pass on to their clients the E-VAT that the government will collect from them based on their income.
“Pait kaayo, sigurado nga mosaka g’yod ang presyo sa palaliton kon sugdan na pagpatuman ang eVAT, unya walay usbaw sa sweldo sa mga trabahador, (The prices of commodities will increase once eVAT is legal, and there is no increase in the wage of the laborers)” Tolentino said.
Despite political crisis, economy growing
Despite the adverse political situation, President Arroyo expressed optimism yesterday that the economy will continue to grow, especially with the implementation of the expanded value-added tax (EVAT) law starting Nov. 1.
“As we are poised for the expanded VAT implementation with strong safety nets, global confidence in the Philippines is resurgent,” she said in a statement after meeting her economic advisers at Malacañang.
“Our economy continues to look up because this government is closely and consistently focused on it,” said the President, whom the opposition has been trying to unseat for the past five months on charges of election fraud.
Brushing off fears that the EVAT law would raise inflation and hit the poor the hardest, Mrs. Arroyo said the Supreme Court go-ahead for the EVAT last Tuesday, paving the way for full implementation on Nov. 1, has boosted investor confidence.
The expanded VAT is the centerpiece of the government’s campaign to control the budget deficit and forestall a looming fiscal crisis, but even Mrs. Arroyo’s allies worry that it may worsen inflation at a time when dissatisfaction with her administration remains strong.
Mrs. Arroyo said the country was “on the threshold of economic takeoff” if it could sustain the interest of foreign investors and creditors who have been encouraged by key reforms such as the expanded VAT and opening of the mining industry.
International credit rating agencies had previously downgraded the Philippines’ international credit outlook due to the failure to implement the expanded VAT.
However, analysts say the Philippines must actually implement the controversial tax measure, which faces legal challenges from opposition and leftist groups, before rating agencies will consider an upgrade.
Lawyers urge Congress to amend eVAT Law
Cebu lawyers are urging Congress to amend the controversial Expanded Value Added Tax Law so that it will not greatly affect the poor people.
The officials of the Integrated Bar of the Philippines Cebu City Chapter headed by Alex Tolentino, however, did not specify in their resolution what particular provisions of Republic Act 9337 or the eVAT Law are to be amended. The law is set to be implemented on November 1.
It was former IBP-Cebu City Chapter president Democrito Barcenas who encouraged his fellow lawyers to pass a resolution asking the congressmen to review the controversial eVAT and to make amendments.
Tolentino said over dyLA yesterday that there is a big possibility that the lawyers will also pass on to their clients the E-VAT that the government will collect from them based on their income.
“Pait kaayo, sigurado nga mosaka g’yod ang presyo sa palaliton kon sugdan na pagpatuman ang eVAT, unya walay usbaw sa sweldo sa mga trabahador, (The prices of commodities will increase once eVAT is legal, and there is no increase in the wage of the laborers)” Tolentino said.
Lawyers urge Congress to amend eVAT Law
Cebu lawyers are urging Congress to amend the controversial Expanded Value Added Tax Law so that it will not greatly affect the poor people.
The officials of the Integrated Bar of the Philippines Cebu City Chapter headed by Alex Tolentino, however, did not specify in their resolution what particular provisions of Republic Act 9337 or the eVAT Law are to be amended. The law is set to be implemented on November 1.
It was former IBP-Cebu City Chapter president Democrito Barcenas who encouraged his fellow lawyers to pass a resolution asking the congressmen to review the controversial eVAT and to make amendments.
Tolentino said over dyLA yesterday that there is a big possibility that the lawyers will also pass on to their clients the E-VAT that the government will collect from them based on their income.
“Pait kaayo, sigurado nga mosaka g’yod ang presyo sa palaliton kon sugdan na pagpatuman ang eVAT, unya walay usbaw sa sweldo sa mga trabahador, (The prices of commodities will increase once eVAT is legal, and there is no increase in the wage of the laborers)” Tolentino said.
10/22/2005
Shares close lower led by PLDT, ahead of VAT ruling
Prospects of a further rise in domestic interest rates also dampened investor sentiment, they added.
The composite index ended down 5.68 points or 0.29 percent at 1,947.46 after trading between 1,941.48 and 1,953.14. Volume turnover reached 306.55 million shares worth 741.26 million pesos.
The all-shares index retreated 5.02 points to 1,179.26.
Losers outnumbered gainers 40 to 18 and 55 stocks closed unchanged.
“There’s a lot of hesitation in the market. Investors are waiting for the court’s ruling on the VAT,” Banco de Oro Universal Bank market strategist Jonathan Ravelas said.
The Supreme Court is expected to rule on whether to lift a three-month old freeze order on the tax law, the centerpiece of the Arroyo government’s fiscal reform program. The tribunal will hold its final deliberation on the case on Tuesday.
On Sept 1, the court voted to uphold the constitutionality of the new VAT law which expands the tax coverage to include previously exempt sectors such as power generation and petroleum products. But the court kept its freeze order until its ruling becomes final.
Ravelas said the likelihood that the central bank will further raise its benchmark overnight interest rates by at least another quarter percentage point before the year ends also weighed on the equities market as this makes fixed-income instruments more attractive to investors.
Dealers said security concerns also resurfaced after the police on Friday used fire hoses to break up a protest march led by a former vice-president and other officials.
It was the second time in as many days that police have used fire hoses to disperse protesters calling for the resignation of Arroyo, whose popularity remains low despite winning an impeachment challenge over allegations she cheated in last year’s elections.
Increase in VAT Injurious to Economy, Says NLC
Nigeria Labour Congress (NLC) has said that the planned increase in the Value-Added Tax (VAT) by the Federal Government will worsen inflation rate in the economy, which is already unbearable and unsustainable.
NLC President, Adams Oshiomhole in a letter dated October 13, 2005 addressed to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, said Nigerians would be compelled to part with more and more of their disposable income, on which there is already so much pressure stressing that the consequent higher price level would certainly worsen the poverty situation in the country.
“There is no doubt that increasing VAT will also compound the deteriorating investment and productive environment in the country. The cost of doing business in Nigeria remains burdensome, arising from wrong macro-economic fundamentals, part of which is an inflation-inducing energy pricing policy.
The implication is that the Nigerian productive environment is uncompetitive, increasingly characterized by factory closures and mass layoffs of workers.
Pre-budget wish list makes fresh calls for VAT discount
Housing associations have renewed calls on the government to address ‘unfair’ tax rules that cost the sector more than £200 million a year.
The National Housing Federation has handed Chancellor Gordon Brown a wish list in its annual pre-budget submission, including slashing the rate of value added tax payable by housing associations on repairs and maintenance from 17.5 to 5 per cent.
The concession would bring associations more in line with councils, which pay tax on maintenance but are able to fully reclaim the money.
The submission also called on Mr Brown to do away with VAT payable on certain types of demolition work and to provide relief on capital gains tax payable on shared ownership schemes.
The government has turned down the request to cut VAT on repairs in previous submissions, but changes to European tax law could pave the way for a change in the rules, the federation said.
Under EU rules, member states cannot introduce any new zero VAT ratings, but Bob Wilson, head of finance policy at the federation, said European law would now allow reductions in the tax.
‘The government can no longer hide behind Europe and say Europe will not allow us to do it because they can,’ he said.
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