spot_img
28.4 C
Philippines
Friday, March 29, 2024

VAT cut eyed in TRAIN’s aftermath

- Advertisement -

TO address the negative effects of the recently passed Tax Reform for Acceleration and Inclusion law, Akbayan Senator Risa Hontiveros on Tuesday filed a bill that seeks to reduce the Value-Added-Tax rate to 10 percent from 12 percent.

Senate Bill 1671, otherwise known as the “Bawas VAT” bill, seeks to provide relief to the low-income earners.

The measure also seeks to align the country’s tax system with the Asean region’s. 

The bill says that, once the collections from a VAT rate of 10 percent reaches 4.5 percent of the GDP, which represents an amount exceeding the revenue being generated by Thailand’s VAT rate of 7 percent, there is ample room to further reduce the VAT rate to achieve full alignment with the Asean norm of 8 percent.

“The government said that the TRAIN law will be beneficial in the long term. The people must make short-term sacrifices for long-term gains,” Hontiveros said. 

- Advertisement -

“But the truth is, the TRAIN law has a big uncompensated impact on large families and individuals earning less than the minimum wage.

“We are asking people who have already suffered and sacrificed so much in life to make more uncompensated sacrifices. This is simply unjust and unsustainable.”

Hontiveros said it was time to strengthen the people’s purchasing power, time for the public to cut clean from regressive taxation, and time to cut the VAT.”

Hontiveros, the lone dissenter to the Senate version of the TRAIN law when it was passed on third and final reading in the Senate, said once her bill was passed, the measure would enforce a progressive reduction in the VAT rate by immediately reducing it to 10 percent effective Jan. 1, 2019.

By Jan. 1, 2022, the measure would again reduce the rate of VAT to 8 percent. 

- Advertisement -

LATEST NEWS

Popular Articles