ITIGIL NA YAN!: There is a move in the Commission on Elections to salvage its illegal purchase of 1,973 Automated Counting Machines in 2003 by using the idle equipment in the coming elections in the Autonomous Region of Muslim Mindanao.

By using the equipment, which should not be kept by the Comelec in the first place, the poll body could aggravate its questionable continued possession of the ACMs and making more remote the possibility of returning them.

Instead of trying to massage back to life the deal struck down with finality by the Supreme Court in January 2004, the Comelec should have returned the equipment and got back the P849,167,697.41 it had paid.

Why are Comelec officials led by Chairman Benjamin S. Abalos Jr. clinging to the illegally acquired equipment?

The “commissioners” cannot muster enough courage to ask theirsuki in the Mega Pacific Consortium to return the public funds paid for the ACM? Are they afraid Mega Pacific might tell them to also return the, huh, goods given them?

* * *

NON-BIDDER WON!: In case you have forgotten, the Supreme Court voided the deal because (1) the supplier, Mega Pacific Consortium, was awarded the P1.3-billion contract although it was not even among the bidders, and (2) the equipment delivered did not pass the criteria set in the election modernization law.

When questions started to pop up, the supplier hurriedly made delivery and the Comelec, also apparently in haste, made payment — moves that some lawyers said may have been intended to seal the flawed transaction beyond recall.

While Comelec commissioners have been scourged at the pillar and charged with graft, I have not heard of charges also being leveled on the auditors who had allowed the illegal delivery and payment. If not, why not?

I wonder if the officers of Mega Pacific, who we were told used to sell only paper supplies to the Comelec before the advent of electronics in the casting and counting of votes, are also facing charges. If not, why not?

* * *

UNDUE HASTE: Talking of haste, the graft complaint filed with the Tanodbayan by Sen. Aquilino Pimentel Jr. against all seven Comelec commissioners appears to have been prepared in reckless haste also.

Acting right after he heard of the SC decision (G.R. No. 159139), Pimentel fired a scattergun shot without first ascertaining if all the commissioners he had accused of wrongdoing actually participated in the awarding of the contract.

The basis of his complaint was Comelec Resolution No. 6074 “to award Phase II of the Modernization Project of the Commission to the Mega Pacific Consortium, having been declared as the bidder that submitted the lowest calculated responsive bid for the Automated Counting Machines.”

That was how gross it was. The commissioners knew all along that Mega Pacific Consortium never participated and never submitted a bid, yet they adjudged it the bidder with the lowest bid and proceeded to award it the contract! Nakakahiya!

* * *

JAVIER OUT: The Supreme Court was so scandalized that in addition to ruling that the contract was illegal and therefore void, it went out of its way to order that those behind the mega-scandal be charged.

But in the Comelec resolution that Pimentel submitted as evidence, while six commissioner led by Abalos signed their approval, the seventh member, Rufino S.B. Javier, was marked absent on “OB” or Official Business and was therefore unable to participate. He should have been left out.

Those who signed the resolution were only commissioners Luzviminda G. Tancangco, Ralph C. Lantion, Mehol K. Sadain, Ressurreccion Z. Borra, and Florentino A. Tuason Jr. (Three of them — Tancangco, Borra and Lantion — are now retired.)

Actually there was no need for Pimentel to file charges under RA 3019, the Anti-Graft and Corrupt Practices Act, because the Supreme Court already told the Ombudsman to investigate and file the proper charges.

But of course his filing the case gave Pimentel, who was running for senator in the May 10 elections, some media mileage.

* * *

VAT ISN’T 10%: It turned out that the formula I used last time to show how Value-Added Tax is computed was wrong. Yet seven out of every 10 readers who wrote me agreed with my computation and drew conclusions on that wrong basis.

This confirms the assumption that people are largely uninformed, if not misinformed, about VAT, whose expanded version is being pushed in Congress by the cash-strapped Arroyo administration.

My main error was in multiplying by 10 percent the total price of the goods to get the VAT due on the purchase.

I thought that was the formula because everybody has been talking of a 10-percent VAT and I have seen cashiers in stores and restos also computing it by taking 10 percent of the total on the invoice.

The experts now tell us that we have to multiply the total price by 1/11 to get the VAT to be added to the price. Who would have thought of that formula, except those who are familiar with the law and those who routinely compute VAT in their businesses?

* * *

DOUBLE TAXATION: Will Malacanang or somebody please explain this expanded VAT that is about to hit consumers with a double wallop below the belt?

I say double wallop because it seems VAT will be in addition to the existing sales tax. Imagine the same goods being taxed twice in a classic and arrogant case of double taxation!

We also want VAT sponsors to explain why they have been hiding from the people the cruel fact that in the final analysis, it is the consumer and not the merchants who will bear the brunt of the imposition.

The businessmen who make and sell the goods are allowed credit (or refund) for the VAT that they pay when they receive or purchase the goods.

The VAT, which grows bigger as the goods go down the distribution chain, is dumped on the lap of the end-consumer. Unlike the businessman, the ordinary consumer cannot get credit or a refund because he is not VAT-registered.

* * *

UNFAIRNESS: It has always been like that. Consumers and ordinary taxpayers have always been fair game, while there is an elite above them that government must touch with velvet gloves and only with their permission.

Even before salaried workers see their pay envelopes, income tax is already withheld as a fixed percentage of their wages. In contrast, their employers are given the option to resort to creative forms of tax avoidance to lower their income tax.

The same unfairness is built into VAT. Businessmen are allowed to deduct from their tax the VAT that they had paid on the goods. No such privilege is given consumers, who will have to pay — no questions asked — whatever VAT appears on the invoice.

In the final analysis, VAT will be largely shouldered by consumers, not by the merchants. Bakit naman ganoon?

* * *

INPUT VS OUTPUT: How are businessmen able to gain credit or refund for VAT that they had paid?

In the law, there are an “input VAT” and an “output VAT” that come into play in determining the VAT to be paid by a VAT-registered taxpayer. Note the term “VAT-registered.”

Output tax is the VAT applied on the sale of the taxable goods or services by the VAT-registered person. It is computed by multiplying the total invoice amount in sales by 1/11.

Input tax is the VAT paid by a VAT-registered person in the course of his trade or business on his importation or local purchase of goods and services from another VAT-registered person. It is computed by multiplying the total invoice amount in purchase invoices/receipts by 1/11.

The VAT to be paid is arrived at by deducting the input VAT from the output VAT.

If you failed to follow that supposedly simple explanation given us by the staff of the House ways and means committee, do not grieve. You are normal.

* * *

DEFECTIVE SYSTEM: Will the experts please correct me if I am wrong, but I see that explanation this way:

If a businessman is supposed to remit to the government a P100 VAT that a buyer of an appliance has paid him as part of the total price, he remits only the balance of the P100 after deducting any input VAT that he had paid earlier.

With that information on how a VAT-registered individual or firm is allowed to deduct “input VAT” from the “output VAT” to determine the net VAT he has to pay, we may have found the reasons why VAT collection efficiency has been only 50 percent.

Anybody with a criminal mind will see that massive cheating is possible in this system where the focus has been on just raising the rate from 10 percent to 12 percent and not so much on ridding it of its systemic defects.