Changing the value-added tax (VAT) status of indirect exporters from the current zero rating to VAT-able as proposed under three pending legislative bills will not have any effect on government revenues, according to new research from the òòò½´«Ã½ (òòò½´«Ã½).
The study, entitled “Assessment of the 2017 Tax Reform for Acceleration and Inclusion”, analyzes the tax-reform provisions in House Bill (HB) 4774, HB 5636 and Senate Bill 1408, including those pertaining to the VAT regime.
The study, authored by Rosario G. Manasan, òòò½´«Ã½ senior fellow II, noted that the bills seek to reform the Philippine VAT system to “eliminate numerous exemptions that have significantly narrowed the VAT base [and] resulted in numerous breaks in the VAT chain, thereby making it more difficult to collect the VAT efficiently and [resulting] in a substantial tax gap [i.e., the difference between actual and potential tax revenues]”.
All three bills propose to change the VAT treatment of indirect exports from zero rated to VAT-able.
The study, entitled “Assessment of the 2017 Tax Reform for Acceleration and Inclusion”, analyzes the tax-reform provisions in House Bill (HB) 4774, HB 5636 and Senate Bill 1408, including those pertaining to the VAT regime.
The study, authored by Rosario G. Manasan, òòò½´«Ã½ senior fellow II, noted that the bills seek to reform the Philippine VAT system to “eliminate numerous exemptions that have significantly narrowed the VAT base [and] resulted in numerous breaks in the VAT chain, thereby making it more difficult to collect the VAT efficiently and [resulting] in a substantial tax gap [i.e., the difference between actual and potential tax revenues]”.
All three bills propose to change the VAT treatment of indirect exports from zero rated to VAT-able.
