racoma.com.phJ. Angelo Racoma on technology, economics, writing, problogging, and getting things done

It was all over the news yesterday (today in my biological clock).  The Supreme court lifted the temporary restraining order on the implementation of the Expanded Value Added Tax law.

Implementation of the VAT law will sharply raise
the prices of goods and services at a time Filipinos are struggling to
cope with surging world oil prices.

The law will take effect on November 1st of this year.

People are protesting all over, and I must say I’m beginning to despair
like every other guy going out onto the streets.  An increase in the
tax rate will most likely not only have a direct effect on commodity
prices, but also corresponding indirect after-effects that could and would further jack up
prices.

For example, food prices will definitely increase with the increase in
tax rate from 10% to 12%, particularly processed foods such as those
you usually purchase at the grocery store.  But since fuel prices will
also increase, it will follow that grocery prices will be further
jacked up because these firms also have to consider their
shipping/transportation costs.

The move is to help balance the (national) budget, one of the main platforms of Government of this Administration.

Crap, I say.

The Administration is so bloated and is such a spendthrift that it will do a
better job at balancing the budget if it were to work more
efficiently.  There’s no need to pass on the burden to the ordinary citizenry.

Is this the bitter pill we need to swallow to ensure long-term and sustainable economic growth and development?  It may be so.  But it comes at the expense of the small people–those who are living at the edge of reason, who barely make a decent living enough to feed their families one small meal a day.

I am not assured that increase in taxes will lead to better Government finances.  For as long as corruption is rampant from the lowest local official to the highest echelons of Government, whatever increase you will have in tax collection will only be in vain.  The select few will be able to siphon more of those funds into their own deep pockets.

And what of the ordinary citizenry?

Are we to be left alone to shrivel up and die of starvation?

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