By Fel V. Maragay

A one-time rebate of P5,000 for individual taxpayers will cushion the impact of the global financial crisis on an estimated two million fixed-income earners, Senator Mar Roxas said yesterday.

Roxas, chairman of the committee on trade and commerce, said he is also supporting the temporary reduction of the value-added tax from 12 to l0 percent as part of his economic stimulus package.

?A tax rebate is a good stimulus package. That means part of the taxes paid will be given back to the people. And this will augment money that they can spend for their basic needs?to pay for tuition fees, house repair, medicines, etc. Instead of the government spending this money, which is prone to leakage, it would be better to return it to the people and let them decide how to spend it,? he explained in an interview with radio station dzRH.

He said if all two-million fixed income earners will avail of the rebate, it will cost the government Pl0 billion.

Roxas said this will only have a minimal impact on the budget deficit which could be easily absorbed by the government

?That amount may appear big, but if taken against the Pl.4-trillion national budget for 2009, that is just actually small. This P5,000 rebate per taxpayer, per family, will help them a lot,? he said.

Under Senate Bill 2689 filed by Roxas, the P5,000 tax rebate per family is good only for one year. But, he said if necessary, it can be extended for another year.

Earlier, Senator Edgardo Angara, chairman of the committee on finance, said leaders of the Senate and House of Representatives have started discussing the proposed two percentage point cut in the VAT.

But Senate President Juan Ponce Enrile said it would be difficult to convince the Executive Branch to agree to the reversion of VAT to l0 percent because it will drastically reduce government revenues and consequently impair implementation of projects.

Finance Secretary Margarito Teves has frowned on the proposal because it will have the effect of inflating the budget deficit that will compel the government to raise its borrowings.