Representative Reynaldo V. Umali has proposed the creation of a people’s fund from the proceeds of the Value Added Tax (VAT) to “close the resource gaps” in public health and education.

Umali (2nd District, Oriental Mindoro) filed House Bill 1142, which seeks to allocate 30 percent of all VAT proceeds for the people’s fund.

“The said portion shall be derived from all proceeds from the VAT after the share of the Bureau of Internal Revenue from actual VAT collections in excess of its collection goal has been derived,” Umali said.

He said the fund would help “close the resource gaps in teachers’ training and salaries, classrooms and school buildings and help alleviate problems of substandard government hospitals, and the lack of medical personnel and equipment.”

“To ensure that the people’s fund will cater to the people’s needs, the President is asked to embark on broad consultations through the different departments and agencies of government on a three-year utilization plan for public education and health,” Umali said.

The President has to submit the three-year utilization plan to Congress for approval, Umali added.

The proposed people’s fund bill, which amends the National Internal Revenue Code, will not reduce the allotment to local government units from VAT as provided for under the Local Government Code.

Umali said the fund shall not be used to augment the maintenance and other operating expenses of any national government agency; government owned and controlled corporations, and local government units.

The measure provides that education and health services shall get fifty percent each from the people’s fund.