Duterte administration plans to increase VAT to 15%

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Value-added tax increase on goods and services is set to aid the P3.35 trillion national budget.

PH Government plans on increasing the Value Added Tax (VAT) to 15% plus an increase also to fuel tax from P4.53 all the way to P10 per liter.

This is to fund the Duterte administration's first national budget of P3.35 trillion which is 11.6% higher than the spending plan for this year.

To add, there is also a plan to lift VAT exemptions on 30 products and services and 13 types of transaction. This is headed by Finance Secretary Carlos Dominguez of Cabinet Revenue Cluster.

“Either we impose an increase on VAT to a maximum of 15 percent or we lift exemptions from too many VAT-exempt transactions. The country’s economic managers believe that there are too many exemptions on VAT [and] many of these... were without good rationale,” as per a House leader who opted to be anonymous.

The petroleum excise tax has been stagnant since 1997 and it is about time for adjustment as this would help trim the losses when the government finally implements lower income tax rates.

A whopping P500 billion in fresh revenues is calculated if the new tax plan would be in effect.
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During President Duterte's first State of the Nation (SONA), he mentioned imposing more tax on the rich and less on the wage earners including the middle income bracket with currently 32% overall tax to bring down to 25%. By doing that, the government will lose P92 billion in tax collections annually. He did not mention anything about increasing VAT.

Wage earners are 100% compliant in paying taxes while only 40% of the professionals such as doctors, lawyers, and engineers were paying right taxes. Government will focus their tax efforts on professionals.

The 2017 Palace-proposed budget is set to be submitted in the House today by Budget Secretary Benjamin Diokno.

source/s: Standard PH

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Duterte administration plans to increase VAT to 15%
Value-added tax increase on goods and services is set to aid the P3.35 trillion national budget.
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