MANILA – Budget Secretary Benjamin Diokno is not keen on heeding calls for lowering the value-added tax (VAT) rate, as such proposals must only be considered after all packages of the tax reform program have been enacted into law.
“I think it’s not time to go back,” he told reporters, when asked to comment on proposals to lower the VAT rate back to 10 percent from 12 percent.
The 10-percent VAT – a sales tax – was first established under the administration of then-President Corazon Aquino. At that time, Diokno was the undersecretary for Budget Operations.
It was then raised to 12 percent in 2006, during the term of former President Gloria Macapagal-Arroyo.
The Department of Finance has said it was looking at the possibility of lowering the 12-percent VAT on goods and services – but only once all the tax exemptions have been rationalized.
“I think we should see how things develop first. Tapusin natin hanggang Package 5,” Diokno noted referring to the five packages of tax reforms the Duterte administration intends to implement.
The first package of the Tax Reform for Acceleration and Inclusion (TRAIN) was signed into law by President Rodrigo Duterte in December. It reduced the personal income tax and expanded the VAT base.
The second package was submitted by the Department of Finance (DOF) to Congress in January, seeking to lower the corporate income tax rates and rationalize fiscal incentives.
“It’s a better tax than income tax – let’s put it that way. Kasi ‘yung income tax nae-evade mo pa ‘yun. ‘Yung VAT, hindi mo mae-evade,” Diokno said. (GMA News)
