Philippine Government Urges Public to Suggest Measures to Mitigate VAT Hike Impact

The Philippine Presidential Palace, Malacanang, is urging concerned sectors to propose measures that will minimize the impact of an increase in the value-added tax (VAT) from 10 to 12 per cent. Press Secretary and Presidential Spokesman Ignacio Bunye emphasized the government's openness to well-meaning suggestions on how to mitigate the effects of the VAT hike. As discussions of the VAT bill entered its second phase, representatives proposed expanding the list of VAT-exempt items to make basic commodities more affordable for consumers. This comes after the passage of the VAT increase bill in the House, which anticipates collecting an additional P80 billion annually from the proposed VAT increase and other taxes.

Key Takeaways:

• The Philippine government is urging concerned sectors to propose measures to mitigate the impact of the VAT hike from 10 to 12 per cent.
• The government anticipates collecting an additional P80 billion annually from the proposed VAT increase and other taxes.
• Some legislators have proposed expanding the list of VAT-exempt items to make basic commodities more affordable for consumers.
• The Legislative-Executive Development Advisory Council had recommended including this measure to protect consumers, but it was not included in the final proposal.
• The government views the Senate's upcoming debates on the bill as an opportunity to examine and improve the country's tax system.
• The President's 10-point agenda aims to disperse and balance development nationwide through fiscal, educational, and economic reforms.
• The government has implemented other fiscal reforms, such as the lateral attrition bill and the sin tax bill, to increase government coffers by P10 billion and P17 billion annually, respectively.

Statistics:

• P80 billion: The additional revenue anticipated to be collected annually from the proposed VAT increase and other taxes.
• P17 billion: The fresh revenues expected from the sin tax bill every year.
• P10 billion: The additional revenue anticipated to be collected annually from the lateral attrition bill.
• 10-12 per cent: The proposed increase in value-added tax (VAT).

Sources:

• Asia Pulse - Philippine Presidential Palace Malacanang is urging concerned sectors to propose measures that will minimize the impact on people of an increase in value-added tax (VAT) from 10 to 12 per cent.
• PNA (January 2, 2005) - Excerpt from the article "Palace urging sectoral groups to propose measures to minimize impact of VAT hike".