Sen. Sonny Angara (INQUIRER.net file photo)
The Department of Finance (DOF) has thumbed down a proposal to reduce to 10 percent the value-added-tax (VAT) rate on goods and services, Senator Sonny Angara said on Wednesday.
Angara, chair of the Senate committee on ways and means, revealed this when sought for comment on Senator Panfilo Lacson’s proposal to reduce the present 12 percent VAT rate to 12 percent.
“Ayaw ng DOF e (The DOF doesn’t like it),” he said in an interview with reporters in the Senate.
“Kasi ang purpose nga nito is to give the tax exemptions and to raise revenue for infrastructures. So pag binaba mo sa 10 percent, mawawalan ka ng infra. Mawawalan ka ng panggastos mo,” Angara said, referring to the proposed tax reform measure that seeks to lower personal income tax and generate more revenues.
(The purpose of this is to give the tax exemptions and to raise revenue for infrastructure. So when you lower it to 10 percent, we are going to lose [budget for] infra. We will not going to have something to spend for it.)
To offset the expected revenue losses from the reduced VAT rate, Lacson said he would propose the lifting of tax exemptions on certain sectors. He projected at least P117 billion revenues if 78 of 143 exemptions would be lifted.
READ: Lacson wants VAT back to 10%
But Angara said the government has already lifted some of these tax exemptions.
“Although hindi natin ma-accept yung amendment to lower the rate to 10 percent, we’re providing more revenues by lifting the tax exemptions on certain sectors,” he pointed out. /jpv