- The DOF is open to the possibility of reducing VAT rate
- VAT rate reduction is possible if Congress will eliminate all VAT exemptions
- Risa Hontiveros filed a bill seeking to reduce the VAT rate to 10 percent
Department of Finance (DOF) Secretary Carlos Dominguez III said it is possible to cut the value added tax (VAT) rate if Congress will eliminate all VAT exemptions.
“As I said many times, the VAT rate here is 12 percent and we only collect 4.7 percent as a percentage of GDP. In Thailand, VAT is only 4.7 percent and they collect 4.7 percent. If we can bring up our collection rate, say to 7 percent by eliminating exemptions, of course we are open to reducing the rate of the VAT,” the Finance Secretary told reporters.
Dominguez, however, said the government must be careful in reducing the VAT considering the many projects that need to be funded.
“At this particular time, because we have a lot of heavy expenditures, we have to be very careful about reducing the VAT rate,” he said.
As per a Philstar story, Dominguez said the DOF is studying Senator Risa Hontiveros’ proposal to lower the VAT.
The lady senator filed “Bawas VAT Bill” seeking to o reduce the rate to 10 percent next year in order to “provide relief for the lower economic deciles of the population affected by the TRAIN [Tax Reform for Acceleration and Inclusion] law.”