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Title: VAT Post by kim on Apr 15th, 2005, 6:51am MANILA -(Dow Jones)- The Philippine Senate Wednesday passed the long-awaited revisions to the value-added tax law, the centerpiece of the government's revenue-raising package aimed at helping balance the budget by 2010. The senate bill, adopted with a 14-6 vote, removed exemptions to VAT now enjoyed by certain sectors, such as power producers and airlines. It maintained the tax rate at 10%, however, contrary to a proposal by President Gloria Arroyo to raise it to 12% that was approved by the House of Representatives. Increasing the VAT rate to 12% was expected to raise PHP50 billion in additional revenue a year. Philippine financial markets have been keenly awaiting the passage of the VAT bill, the biggest revenue-generating measure among the government's proposals. In lieu of a higher VAT rate the senate increased corporate income tax to 35% from 32%, and raised by 2 percentage points to 7% the gross receipts tax imposed on some transactions of banks and other financial institutions. The increase in corporate income tax is expected to yield an additional PHP12.3 billion a year in revenue. The tax rate will revert to 32% in 2009 when the fiscal situation is expected to have significantly improved. Exemptions to the VAT that are now enjoyed by power producers, oil companies, airlines and shipping companies, as well as doctors, lawyers and other professionals earning more than PHP1.5 million a year, will be removed. Removing VAT exemptions for power and oil companies has been controversial because it is expected to raise the cost of electricity and fuel. As a precaution, the senate will exempt diesel, kerosene, cooking gas and electricity consumed by households from VAT. Power producers will also be prevented from passing VAT on to consumers. Senators and congressmen are now scheduled to meet Thursday in a bicameral conference committee to resolve conflicting provisions of their bills. Senator Ralph Recto, chairman of the Ways and Means Committee, is confident the conference committee will only take a week to hammer out a final version of the bill. Senate President Franklin Drilon said Wednesday that he expects President Arroyo will be able to sign the final VAT bill into law before the end of April. The additional taxes are expected to finance various government projects, as well as reduce the budget deficit, which is expected to reach PHP180 billion this year. -By Cris Larano, Dow Jones Newswires; 63-918-900-1320 Dow Jones Newswires 04-13-05 1212ET Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved. |
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Title: Re: VAT Post by mylane on Apr 22nd, 2005, 8:06pm hmmmm...interesting...lets see if this will work... |
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Title: Re: VAT Post by kim on Apr 25th, 2005, 10:42am Well they have no oter choice but to increase the VAT because our government has no money.. Why dont we have money? Its because they are so damn corrupt... If it was me I'd say they should make their tax collections much more efficient so that all those who are not paying their taxes right will be punished. There would be no need for any VAT increas if they could collect all the umpaid taxes |
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