Two Cebu solons support six percent VAT reduction

CEBU, Philippines - Two Cebuano congressmen are supporting the proposal to reduce the 12-percent Value Added Tax by six-percent.

Cebu 1st District Rep. Eduardo Gullas and 4th District Rep. Benhur Salimbangon said they are endorsing House Bill 3859 filed by Batangas Rep. Hermilando Mandanas seeking to replace VAT with Value Simplified Tax which would reduce the current 12-percent VAT to only six percent.

Gullas said although the proposal would reduce the income of the Bureau of Customs but it will also increase the collection of the Bureau of Internal Revenue.

“I’m in favor to it. The level of income of the Bureau of Customs will decrease but the level of income of the Bureau of Internal Revenue will likewise increase,” Gullas said.

Gullas and Salimbangon were invited by the members of the House committee on ways and means during a public consultation held in Cebu yesterday.

The public consultation was organized by the Mandaue Chamber of Commerce and Industry, Cebu Business Club, Cebu Chamber of Commerce and Industry and the Philippine Institute of Certified Public Accountants.

Salimbangon said they need to get the inputs from the business sector on the different taxation system of the country to help them come up with the final draft of the bill.

Mandanas proposed VAST in lieu of VAT to establish a simple tax system that will reduce the discretion or interpretation of tax applicability. Under the proposed bill, it simplifies the tax system by applying a straight six percent on the importation of goods and on the sale of goods and services.

It likewise proposes that all exemptions under VAT system will be retained and treats zero-rated transactions as VAST exempt.

The proposed bill also increases the threshold of exemption from VAST for small vendors and sales/lease of real estate and repeals the input tax credit and claims for presumptive VAT. (FREEMAN)