Binay: No to higher VAT


Vice President Jejomar Binay on Thursday said he disagrees with the government’s proposal to raise the current value-added tax (VAT) from 12 percent to 14 percent to compensate the loss to be incurred from lower tax rates if the tax reform bill is passed into law.

“The Philippines already has the highest VAT rate in the region. Increasing VAT should only be a last resort,” Binay said in a statement.

“Raising VAT would cancel the effects of the tax reform act and defeat the goal of allowing our countrymen to enjoy more of their hard-earned money,” he said.

Binay added that lowering tax rates will allow consumers to spend more and that the government will recover some of the short-term revenue loss through increased consumption taxes, without necessarily raising VAT.

“Instead of being fixated with VAT, we should look at a menu of options, including improved tax collection efficiency and more aggressive campaign to catch tax evaders; sliding scale excise tax on gas, diesel and other oil products; sale of government assets and privatization of select government-owned and -controlled corporations; approval of revenue-generating measures; and a stronger crackdown on smugglers,” he said.

Binay described the country’s tax system as burdensome and exasperating.

A recent study that the Philippines has the most tedious tax payment system, he said, underscores the urgency of tax reform in the country.

The study by international audit firm PricewaterhouseCoopers puts the Philippines in 127th place among 189 economies in the ease of paying taxes.

It revealed that businessmen take 193 hours to pay 36 different kinds of fees and taxes per year in the country.

“How can we encourage foreign investors to put money here if we are going to make it difficult for them to do business in our country? They certainly would say it’s not fun in the Philippines,” Binay said.

He noted that it is “easier” to pay taxes in Ethiopia (112th in rank) where reportedly there is widespread hunger, in Syria (117th in rank) where people are fleeing because of political violence and in Kosovo (63rd in rank), which had just emerged from war and is now one of the newer independent countries.

The Vice President said while Malacañang has promised to simplify the process of paying taxes, it has not offered any concrete steps so far.

“It is easier to give promises and make plans but what we need is tested and competent executive ability,” he added.

Binay said that similar to what he did as local executive of the nation’s financial capital, Makati City in Metro Manila, should he be elected President, he shall put a sense of urgency in all government processes.

“From the normal 16 steps, we will reduce the requirements in the business registration system to six steps to further improve our competitiveness. Once the basic requirements have been met, provisional permits shall then be issued,” he added.

If there is no decision from a certain department or agency within a certain number of days, Binay said, an application should be as good as approved so as not to stall the process.


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  1. Buti pa si Hillary Clinton buong tapang na humarap sa imbestigasyon ng Gop, 11 hrs na q&a vs republican congressmen pero hindi nila natinag kase alam nya kakampi nya ang katotohanan. Samantalang si Binayupak sa tatlong senador lang, nawala na ang bayag. Kahiyahiya kung isang duwag na katulad ni Binayupak ang msgiging Pres. ng Pilipinas.

    • Chris, you can say right words just to voice your opinion but it looks you are uneducated person. Others will respect in doing so.

  2. This news just highlights one of the reasons why our economy is growing. PNoy and his group used to oppose the expanded VAT law. Now they realizes how it has helped prop up the economy. Exactly why they want to increase it from 12% to 14%.

    It’s election time again. That’s why they are now very vocal in pushing for lower income taxes. This will benefit everyone including the workers, which is the majority of voters. They however, would want to compensate it by increasing the VAT from 12% to 14%. The effect of which still affects the lowly workers.

    Have we ever asked ourselves why despite the perceived growth of our economy, it still cannot be felt by the masses? The answer to that is simple. Our leaders do not work for us, workers and lowly masses. They work for the oligarchs.

    Lowering our income taxes would mean retaining a bigger chunk of our salary and that would increase our buying power. However, with the increase in VAT, it would not mean a thing since prices would definitely go up. Whatever increase we have in buying power would be eaten up by the increase in living cost due to increase in prices of everything.

    Companies — owned by the oligarchs, will not be affected by the VAT increase as they would just pass it on to the consumers. But they will benefit handsomely on increased revenues due to higher buying power of the consumers plus the lower income taxes that they would be paying.

    Who says life is fair?………

  3. lorenzo legisniana on

    Madali magsalita pero pag presidente na magiiba na ang tono..iisipin na kung paano makalikom ng pondo..

  4. Nancy Bulok Cake on

    These are ld issues that Binay wil tke advantage o making prmises. He mentioned some corrupt countries where it is easier to pay taxes. From the big mouth of Binay, we will be like these countries when he will be the president. Binay has nothing in his brain except to steal money from the government. NO to Binay. Warning: It has been said that China will support Binay in order to get all the Spratly Islands that belong o the Philipines. The NPAs, LEFTISTS and China will surely be behind Binay for Binay will sell the whole Philippines to China at 30% commission. Let us continue to pray to save the Philippines from the Binays.

  5. Yes to Lower Taxations!

    Yes, to stricter collection of Taxes from big corporations that evade paying the right amount of taxes !