House Approves VAT

The House of Representatives, voting 126-11, with no abstention, approved House Bill 3555, the proposed law that seeks to increase value added tax or VAT from 10 percent to 12 percent.

The Bureau of Internal Revenue defines VAT as “a business tax imposed and collected from the seller in the course of trade or business on every sale of properties (real or personal), lease of goods or properties (real or personal) or vendors of services.” According to BIR, it is an indirect tax so ” it can be passed on to the buyer. ”

The Arroyo administration, which is pushing for VAT, keeps on claiming that the proposed increase in the said tax would not affect the ordinary people. On the other hand, the opposition and the activists say otherwise.

“What are these additional products to be exempted from VAT? They include noodles, bread, sardines and certain other basic commodities being bought by ordinary people. The additional list for exemption from VAT forms part of the safety nets as mentioned by the President to protect our less privileged consumers,” according to Sec. Ignacio Bunye.

On the other hand, Bayan Muna Rep. Teddy Casino claims that “the double whammy of increasing the VAT and lifting its exemptions is a killer tax that will hurt 80 million Filipino consumers.” His office claims that “the average Filipino’s meal is the first to be sacrificed,” and the increase would certainly raise the prices of pandesal, sardines, coffee, milk, sugar and even instant noodles–now known as the Filipino national food.

Whom do you believe?