Congress will thumb down a planned removal of value-added tax (VAT) exemptions for senior citizens and persons with disabilities (PWD), House leaders said on Wednesday.
House Minority Leader Danilo Suarez of Quezon and House Deputy Minority Leader Joselito Atienza of Buhay party-list expressed their vehement opposition to such plan of the Duterte administration to broaden the tax base to offset the government’s revenue loss resulting from lowering of income and corporate income taxes.
The plan was revealed by the Department of Finance officials to senators on Tuesday.
“Why would you do that, especially to senior citizens whose simple joy is their VAT discount? Remember, a tax measure emanates from Congress, and I am telling you that won’t happen,” Suarez, who is 73 years old, told reporters.
An individual qualifies as senior citizen if he or she is 60 years old or above.
“The value of their VAT discount is not much. Besides, there are many ways to raise revenues without touching those incentives. For one, the Customs bureau has not been efficient in tax collection for the last six years,” Atienza, who is 75 years old, added.
In President Rodrigo Duterte’s proposed P3.35-trillion budget message, he said compensating for the foregone revenues from lower income tax rates will be done by expanding the VAT base and indexing oil excise taxes to inflation.
Suarez has vowed to seek a tax-free-income for workers earning P30,000 and below, a campaign promise of then-Vice President Jejomar Binay.
Binay lost to Duterte in the 2016 presidential race by 11 million votes.
“We will pursue the campaign promise of former Vice President Binay. It could mean a P27 billion [government revenue]loss but we can cover that by making the water distribution units like Manila Water and Maynilad pay their dues to their source of water,” Suarez pointed said.
He is eyeing to amend the charter of the Metropolitan Waterworks and Sewerage System (MWSS).
Suarez, however, could not commit if this meant additional charges for consumers.
“Right now, the salaries of those in MWSS are getting paid by these distribution utilities. It is strange that the regulator of these utilities depend on them for salary so it is time to amend the MWSS charter,” he said.
Atienza said the additional charges should not be passed on to consumers.