SCALING TREACHEROUS CLIFFS , VAT’S BETRAYAL TO THE FILIPINO WOMEN

March 8. 2005
Filipino women are coming out of domesticity and into the labor market. For many it is a choice forced on them by the need to augment the family income. For more than 13 million Filipinas in the labor force, getting hold of jobs is a painstaking climb on jagged paths and treacherous cliffs.

This year ushers in a new obstacle: the proposed increase in the Value-Added Tax (VAT) from 10% to 12% and the removal of exemption of various goods. Disguised as a cushion to help ease the Filipinos' excruciating climb in the form of services, the VAT is nothing more than a sharp blade waiting to be held, cutting deep into the workers palms and even harder on the women.

SETTING THE RECORD STRAIGHT. The VAT is borne by consumers. It is never a charge on firms who pass on the tax to product users. Contrary to claims by our lawmakers, firms cannot be prevented from passing on the tax to consumers.

SHRINKING THE HOUSEHOLD BUDGET. The VAT alters the budget allocation of households for basic needs such as food, clothing, transportation, utilities, and so on. Contrary to the government's claim that it is not inflationary, the VAT adds to the price of consumer goods. It is an added burden on women who must make do with a family budget whose value is shrunk by the VAT as well as financially support their households.

EMPTY PROMISES. Poor public service comes at a high price. The government claims that the additional revenue from a higher VAT will be used to build more classrooms, deliver healthcare and basic public services. But working women have yet to see actual improvements in basic public services, let alone protection in the labor market. Since the VAT's implementation in 1988, government spending did not fortify the women it has sworn to protect. This year (2005), the allocated expenditure for social services in real terms is PhP58.9 billion, a 2.3% drop from last year's PhP60.3 billion. Obviously, whatever revenues that will be collected from the new VAT rate would just drip to the public.

COMPETITIVE TAX RATE, UNCOMPETITIVE SERVICES. The proposed increase in the VAT, according to the government, puts our tax rates at par with developing countries in Asia. But the government is silent on the other side of the issue: local public services are inferior to those of our neighbors. The only way a higher tax, especially a regressive tax like the VAT, can be justified is if it leads to better public services.

THE REAL DEAL. To date, of the more than 11 million employed Filipinas, only a little over 1.5 million have managerial positions; the rest are domestic helpers, cleaners, market/street vendors, salespersons, housekeepers, waitresses, nursemaids, baby sitters, hospital attendants and nursing aids. These are the women who will bear the brunt of a higher VAT.