By Philstar
The Department of Finance (DOF) is revisiting the implementation of the value-added tax (VAT) system as the government can no longer afford additional VAT exemptions in order to maximize potential revenues.
During the Kapihan sa Manila Bay forum, Finance Secretary Benjamin Diokno said the government stands to lose more if it will introduce additional exemptions to the VAT system, which is a form of consumption tax.
“The government cannot afford to lose additional revenues on VAT,” Diokno said.
“The DOF does not support any legislative or non-legislative proposals that would further erode the VAT revenue base,” he added.
Some lawmakers are pushing for the expansion of discounts as well as VAT exemption for senior citizens.
“There are many other proposals because they do not want the VAT. But I always say that consumption tax is better than income tax because it depends on your ability to consume,” Diokno said.
The Philippines has a long list of VAT exemptions, which prompted the previous administration to present a fiscal consolidation plan that included the repeal of some of it.
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