The Lesser Evil: Assessment of the 12% VAT Removal on Petroleum products (part 3)

Mikhail Oñate

Implications of VAT Removal: An Analysis

Although the removal of Value Added Taxes (VAT) on oil and petroleum products seems very desirable to most of us consumers, careful study of it and its implications to the overall Philippine Economy reveals much surprising fact than what is presented to us in the media. The following fallacies are presented in the hope of shedding light on the true consequence of the removal of VAT.

The Lesser Evil: Assessment of the 12% VAT Removal on Petroleum products (part 2)

Mikhail Oñate

Duality of Nature

On the Micro-Level, a dual effect on society emerges. It can be noted that people are limited primarily by income and prices of goods and services. (Case 2008) People who utilize privately owned vehicles on a regular basis, both for travel habits or business purposes and despite the rising prices of oil, are faced with increasing costs.  Under normal Income and Price constraints, households that utilize privately owned vehicles will continue to do so for as long as they operate within their constraints. On the other hand, households that receive lesser income must also operate within their limitations.