6th On-Line Presidential Forum
"Besides the Income Tax and the Real Estate Tax, I Will Eliminate the E-VAT on the GODPEW Products,as well as on food and medicine!" - Bishop of the Right and the Poor(BRP)
In the 6th On-Line Presidential Forum, 2010 Presidential aspirant BRP explains why he must remove the E-VAT on the GODPEW products, food and medicine. The "GODPEW products" are : Gasoline/liquefied petroleum gas, Oil, Diesel, Power, Electricity, and Water. BRP also calls them "trigger products".
To further help the poor, who are the most hurt sector when EVAT was imposed, BRP will also immediately reduce the EVAT on all other items toseven (7) per cent, with the objective of incrementally reducing the EVAT to just three (3)per cent before his 6-year term of office ends.
Philippine Challenge : Due to the spiraling cost of oil per barrel in the international market, various sectors, including the influential Catholic Bishops' Conference of the Philippines, have been demanding for the removal of E-VAT on oil, diesel, and petroleum products. But the Arroyo administration has adamantly refused to remove the E-VAT on gasoline, oil, and diesel. If you will become the next President of the Philippines, will you remove the E-VAT on gasoline, oil, and diesel?
Bishop of the Right and the Poor (BRP) : Yes! The removal of the E-VAT on these products are necessary in my pro-people, pro-poor,pro- business program of government. In my first 100 days as President of the Republic, I will declare the removal of the E-VAT on these items. But I will also remove the E-VAT on three other "trigger products" - power, electricity, and water, as well as on food and medicine..
QUESTION : You can afford to do this?
ANSWER : Sure! I can.
Q : Why can you afford to remove the E-VAT on gasoline, oil, and diesel, but President Arroyo can not, or does not want to do it?
A : That's an interesting question. My answer is simple - the President has been using an inherited, flawed and burdensome economic model - the traditional 'tax-and-spend' model. The Mercado Economic Model(MEM) is completely different from the traditional model. It is an improved version of Reaganomics.
Q. Kindly explain the two economic models.
A. Philippine presidents since the time of President Manuel Quezon have been using the traditional 'tax-and-spend' model. The government needs money to fund its infrastructure and social services programs. So, they have to add and increase both the direct and indirect taxes. For instance, even now that the people are hard-up, we read in the papers pronouncements of certain public officials about the need to raise the excise tax and the EVAT on goods and services. Why? Their reason is the traditional reason - the government needs bigger fund to finance bigger government expenses in public works and social services. And so, the annual national budget has to be raised at the expense of the people. The Mercado Economic Model(MEM) will not do that. It will raise higher annual revenues for the government by first raising family incomes. I will do this by first raising the family incomes of Income Taxpayers through the total removal of the Income Tax.
Q. So the methodologies and objectives of the two economic models are different?
A . That's absolutely right.
Q. Why can't President GMA change her economic model at this point in time?
A. There's a saying, "You don't change horses midstream".
Q. So, in the Mercado Economic Model(MEM) which you will use if you are elected as the next President of the Philippines, do you absolutely believe in the necessity of totally removing the direct taxes such as the Income Tax and the Real Estate Tax on inherited properties?
A. Yes. In the Mercado Economic Model(MEM), the total removal of the Income Tax and the other direct taxes will create the following :
1) the rise of family incomes,savings and spendings;
2) the rise of business incomes, savings, and spendings;
3) the rise of government income,savings and spendings;
4) the creation of more jobs;
5) the increase in national productivity, and ;
6) the making of a strong and sustainable social and economic growth.
These are the things which the MERCADO ECONOMIC FORMULA (WEG+HIS+BP= SEG)/MERCADO ECONOMIC MODEL will do.
Q. The traditional economic model can't do this?
A. It can do one thing - increase government income at the expense of an overtaxed people. And when people are financially hard-up, they don't spend much, so businesses suffer. When businesses suffer, many of these close shop, and jobs are lost. Staggering national unemployment is the result.And when people lose their jobs, or new graduates can't find employment, then poverty looms. Is this happening in the Philippines today? You can answer it yourself.
Q. Why do you have to remove the E-VAT on the GODPEW products?
A. These are what I call "trigger products". The rise in the prices of these products will trigger the rise in the costs of other products. For instance, the rise in the costs of gasoline,oil, and diesel will cause the rise in the price of rice,sugar,vegetables, fish and other commodities. The rice planters , the sugar planters, the vegetable planters, and the fishermen need gasoline,oil, and diesel in the production of their goods. Naturally, the rise in the prices of gasoline,oil, and diesel will increase their total production cost. Add to these is the cost of transporting these products to the metropolis. And so, they will have to increase the costs of their produce. This is what happens,too, when they increase the costs of power, electricity, and water. These are badly needed in the production of goods and services. So, the increase in the costs of these products will "trigger" the increase in the costs of the products which are produced when manufacturers use them.
Q. So the rise in the costs of these products will trigger inflation, and so you have to bring down their costs by removing the EVAT to check inflation.
A. That's right. You can be a good economist.
Q. After losing the Income Tax and Real Estate Tax on inherited properties, do you really believe that you can still afford to remove the EVAT on the GODPEW products, as well as on food and medicine?
A. Sure! I believe in removing the E-VAT on the
GODPEW products, as well as on food and medicine which are very important for everyone. The rich can easily handle their purchases of food and medicine, even with the current 12 per cent EVAT. But the poor have real difficulty in doing this. This is the reason why I believe in eliminating the EVAT on these products. If I don't believe in this, then I won't do it.
Q. If you remove the EVAT on these products, the government loses income again.
A. That's the traditional way of looking at it. I see it differently. When I remove the EVAT on these products, the costs of the goods and services which are produced by using these will go down.When goods and services are cheaper, the more-moneyed former Income Taxpayers who now benefit from the removal of the Income Tax will buy more goods and pay for more services which they need. The volume of sales of goods and services will bring higher tax collections for the government. The consumers (i.e. the people) are happy and the government gains more for its annual national budget. The Mercado "GRP" or Government Revenue Plan is "minus 10 plus 81". This means that after losing 10 per cent of government income due to the removal of the Income Tax and the Real Estate Tax on inherited properties, I, as the Chief Executive, will give the government 81 per cent more in revenues which will come from five main sources of government funding. So, I have 71 per cent more, in addition to the annual national budget. This is my "trade secret", but I will reveal this at the national televised debates during the campaign period.
Q. So, your top priority in raising the annual national budget is the happiness and welfare of the people first.
A. This is my top priority. It is an absolute priority
in good public governance. As a follower of the Lord Jesus Christ, helping the people is my mission because God loves them, and is highly interested in their welfare and being. This is the reason why I want to run for President in 2010!
