Imee Marcos: Suspending VAT on basic commodities will benefit more Filipinos
Instead of suspending the excise tax on fuel next year, Ilocos Norte Gov. Imee Marcos wants to suspend the value-added tax (VAT) on basic commodities, saying that it will benefit more Filipinos.
“The suspension of the VAT would provide immediate relief to Filipino consumers. Given the magnitude of prevailing tax rates, the temporary suspension of the VAT on necessities would be immediately felt by millions of Filipino families,” Marcos said in a statement on Sunday.
“Suspending the VAT on basic food items, fuel and electricity will directly counteract the strong inflation pressures on these goods,” she added.
Earlier, the governor called for the immediate one-year suspension of the VAT on basic food commodities, fuel, and electricity to address the skyrocketing inflation in the country.
READ: Imee Marcos pushes for one-year suspension of VAT
While VAT revenues account for a fifth of overall tax revenues, amounting to approximately P365 billion, she noted that the national government can absorb the VAT revenue loss given the rising tax revenues with the Tax Reform for Acceleration and Inclusion Law (TRAIN Law).
“While collection efficiency has improved, there are still areas for improvement, and thus taxes to be collected. If, for example, income tax collection grows by at least 10 percent, the government is poised to earn P102 billion in 2018 and P113 billion in 2019,” the governor said.
“That 10 percent growth rate in tax collections is even an underestimate given that our economic growth remains strong amid high inflation and the 2019 mid-term elections will spur economic activity,” she added.
TRAIN Law excise taxes will contribute P85 billion while running after tax evaders more vigilantly could add another P25 billion to compensate for the potential revenue loss if VAT is suspended, Marcos noted.
However, 17 senators from the Senate Majority bloc earlier asked Duterte to support their move to suspend any further increases in excise taxes on fuel.
“We, the undersigned senators who are supportive of your reform efforts, respectfully solicit your support in a move for both Houses of Congress to suspend any further increases in excise taxes on diesel, gasoline, and other petroleum products for 2019 and 2020 as mandated RA 10963 or the ‘Tax Reform for Acceleration and Inclusion (Train Law),’” the letter sent to the President read.
Senate Majority Bloc Leader Miguel Zubiri, one of the senators who signed the document, said suspending further increases in fuel excise tax under the TRAIN law was aimed at reining in inflation, which soared to a nine-year high of 6.7 percent in September. /ee
READ: Senators urge Duterte to suspend excise taxes on fuel
