The Department of Finance (DOF) seems to have been listening to the clamor of the public against a plan to remove the value added tax (VAT) exemption given to senior citizens and persons with disabilities (PWDs) and is considering abandoning the idea.
According to Sen. Juan Edgardo Angara, the Finance department will be coming up with a revised tax reform proposal that seeks to generate additional income for the government but without taking out the VAT exemption of senior citizens and PWDs.
The DOF drew flak last year for its plan to repeal some exemptions from VAT being granted by the government to some sectors including senior citizens and PWDs.
In its initial proposal, it wanted to expand the VAT base by limiting exemptions to raw food, education and health, thus repealing laws exempting senior citizens and PWDs from VAT.
DOF officials, in a hearing of the Senate ways and means committee headed by Angara, said they are eyeing the removal of VAT exemption of senior citizens for non-essential goods and services such as travel, fare and restaurants.
Republic Act 9994 or the Expanded Senior Citizens Act of 2010 grants VAT exemption to senior citizens, while Republic Act 10754, which exempts PWDs from VAT, was signed into law in March last year but was only implemented in December.
Angara said the DOF recently presented to him the latest draft of the revised version of the first of six packages of the Duterte administration’s comprehensive tax reform program.
Package 1 seeks to lower personal income tax rates, broaden the VAT base and adjust excise taxes of petroleum products and automobiles.
“The DOF is open to retaining the VAT exemption of senior citizens and PWDs. This means that the current administration is listening to the clamor of the Filipino people,” according to Angara, who was among those against the removal of VAT exemption.
The DOF has not revised its proposal to increase the excise tax being imposed by the government on regular gasoline and other products to P10.00 per liter and the imposition of P6.00 per liter excise tax on diesel, kerosene, liquefied petroleum gas (LPG) and other products that are currently exempted from the excise tax.
Many senators have expressed opposition to the plan, saying the government should first work on improving tax collection and rationalizing fiscal incentives granted to various businesses. JEFFERSON ANTIPORDA