Skip to main content

Gatchalian Criticized Department of Finance' Proposal To Increase VAT

gatchalian criticized DOFs proposal to increase VAT

As part of the government’s plan to reform the tax system, Senator-elect Sherwin Gatchalian has criticized the proposal of the Department of Finance (DOF) to increase the value-added tax (VAT) rate while reducing income tax rates.

The proposal of DOF according to him is “anti-poor”.

In a PNA report, Senator Gatchalian quoted...

The reduction in the income tax rates will not be felt by the poor because their incomes are already exempted from taxation. The poor, however, will be adversely affected by any increase in the VAT rate.
DOF proposed to increase the VAT from 12% to 14% and expand the VAT base by removing all exemptions; except in agriculture, banks, education, health and remove zero-rating except direct exports.

The DOF submitted to Congress last month the government’s tax reform bill. This includes tax exemption to all wage earners with an annual income of less than P1 million.

A study cited by Gatchalian which was conducted by former Secretary General Romulo Virola of the National Statistical Coordination Board, revealed that over 74.7 percent of the population or 14 million families comprise the lower class, while only 0.1 percent or 21,200 families constitute the upper class.

The remaining 25.2 percent fall within the “middle class,” or the 4.7 million families with five members who earn P328,000 to P4 million a year.

Senator Gatchalian explained...

Given the inelasticity of basic goods and services covered under the VAT, the burden of the increased VAT rate will be shifted from the producers to the consumers. The poor will be forced to allocate a greater proportion of their already meager incomes on utilities, fuel, and other basic consumption goods and services.
For the knowledge of all, Philippines has the highest VAT rates at 12% in Southeast Asia. Senator-elect Gatchalian also added that...
Increasing the VAT rate will definitely have a negative effect on the purchasing power of the poor, who are always the first to bear the brunt of price hikes of basic commodities and utilities.

READ ALSO: Death Penalty For PLUNDER Wants Senator Panfilo Lacson[1]

If you agree with Senator Gatchalian's remarks, kindly share this article. Thank you!

Source: Politiko[2]
Photo credit: wingatchalianforsenator[3]

References

  1. ^ Death Penalty For PLUNDER Wants Senator Panfilo Lacson (www.allthingspinoy.com)
  2. ^ Politiko (politics.com.ph)
  3. ^ wingatchalianforsenator (www.google.com.ph)

Popular posts from this blog

You can pay at a restaurant by smiling at a camera

© Provided by Engadget As easy as it is to make purchases in the era of tap-to-pay services , it's about to get easier still. Alipay (which handles purchases for Chinese shopping giant Alibaba) has launched what it says is the first payment system that uses facial recognition to complete the sale. If you visit one of KFC's KPRO restaurants in Hangzhou, China, you can pay for your panini or salad by smiling at a camera-equipped kiosk -- you need to verify the purchase on your phone, but you don't have to punch in digits or bring your phone up to an NFC reader. The system (Smile to Pay) is purportedly resistant to spoofing with photos and other tricks. It relies on both depth-sensing cameras and a "likeness detection algorithm" to make sure it's really you. Reportedly, the technology is good enough that it can accurately identify people even when they're disguising themselves through makeup or wigs. You shouldn't have to worry about someone buying ...

Apple named ‘most innovative’ company by a magazine

© Provided by IBT US Apple has just been named as the “Most Innovative” company of 2018 by a business magazine. The reasons cited why the Cupertino giant emerged triumphant on the list included the company’s ability to design processors that are optimized for its latest hardware and software.  Fast Company published Tuesday its list of the World’s Most Innovative Companies 2018 in the consumer electronics sector and Tim Cook’s company was the one that snagged the top spot. The publication indicated in the list that the main reason why Apple ranked the highest was because it produced the “phone of the future” for today’s market.  The magazine also published a lengthy explanation on why Apple is worth the “most innovative” title this year. According to Fast Company, the Cupertino giant had a notable 2017 due to the stellar performances of the wireless AirPods and the Apple Watch Series 3 and the launch of its own AR platform, ARKit, as well as the release of the outst...

DOF opposes tiered approach to tax on sugary drinks

© Provided by Mediamerge Corporation MONEY- Tax thumbnail The Department of Finance (DOF) is not amenable to Senator Juan Edgardo Angara's suggestion to implement the proposed levy on sugar sweetened beverages via a three-tier system. "We oppose the tiered approach. Meaning 'yung first seven grams will be tax free and then after that would be taxable," Finance Undersecretary Karl Chua said during the Economic Journalists Association of the Philippines (EJAP) Economic Forum in Manila on Friday. Chua note the tiered approach may compel manufacturers to come up with smaller packaging. "So you can drink three of them with no taxes," the Finance official said. It will defeat the purpose of imposing excise tax on sugary drinks as a health measure, he added. During deliberations on the comprehensive tax reform bill, Angara floated the idea of implementing the excise tax on sugar sweetened beverages under a three-tier system to incentivize those who manufactu...