We’d like to think they mean well, but this isn’t going to make people miss them when they leave.
Yes, you got that right, the Department of Finance (DOF) — which is currently led by outgoing President Noynoy Aquino appointee Cesar Purisima — has suggested a comprehensive tax reform package for incoming President Rodrigo Duterte.
“The DOF is essentially telling Duterte to increase the value-added tax (VAT) from the currrent 12% to 14%. It also proposed to expand the coverage of VAT to include senior citizens and persons with disability (PWDs). They also want him to repeal other laws providing VAT exemption,” reports ABS-CBN News.
As if that’s not enough to make people hate them, the DOF also suggested “higher excise taxes on gasoline, diesel, and other oil products.”
The report noted that under the so-called tax reform package, “the government will provide incentive options available only to ‘export-oriented enterprises’ and ‘strategic enterprises.'”
The report went on to indicate: “The DOF said, to ease the tax burden, tax reform should also include reducing income tax rates to 25% from 32%, as well as imposing a PHP1 million income tax exemption ceiling for wage earners. The DOF also wants to bring down corporate income tax to 25% from the current 30% in five years.”
If that sounds like one step forward, two steps backwards it is.
The country’s 12% VAT is among the highest in Asia, according to this table by Business In Asia. Hong Kong and Myanmar doesn’t charge VAT, while Singapore charges 7%. The highest is China at 17%.
VALUE ADDED TAX IN ASIA
– Myanmar 0%
– Japan 5%
– Laos 5%
– Singapore 7%
– Thailand 7%
– Vietnam 7%
– Cambodia 10%
– Indonesia 10%
– South Korea 10%
– Malaysia 10%
– Philippines 12%
– China 17%
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