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VAT for public-transport operators mulled

THE Department of Finance is considering the inclusion of public-transport operators in the value-added tax system to enable them to avail of the input-output tax mechanism in view of the proposed lifting of the VAT exemption of petroleum products.

The finance department has proposed the withdrawal of the VAT exemption of the sale or importation of coal, natural gas and petroleum products, as an alternative to the P2 across-the-board hike in the excise tax on petroleum products being pushed by the economic managers.

Under the present system, common carriers are levied a tax equivalent to 3 percent of their quarterly gross receipts.

Finance Undersecretary Grace Pulido-Tan said the percentage tax system has not been effective in generating substantial revenues from the transport sector because the minimum quarterly gross receipts set by the government are too low.

The figures have not been adjusted since 1978.

“The Bureau of Internal Revenue has not been able to collect much from them. If they’re going to be placed under the VAT system, it would be more efficient,” Tan told reporters.

The government has set minimum quarterly gross receipts of P3,600 for taxis operating in Manila and other cities and P2,400 for those in provincial areas, to serve as a basis for computing the tax.

A minimum of P2,400, meanwhile, is set on jeepneys plying the Manila route, and P1,200 on those in the provinces.

For public-utility buses, a minimum of P3,600 is imposed on those with less than 30 passengers; P6,000 on those with 30 to 50 passengers; and P7,200 on those with passengers exceeding 50.

The finance official said that the proposal to repeal the VAT exemption of petroleum products, if approved by Congress, should not have an inflationary effect on transport fares.

By Armie Margaret Lee

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