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Party-list group seeks tax exemption for basic goods
In The Press Posted on May 22nd, 2011.
CITING rising prices of basic goods, Gabriela Women’s Party has filed a bill seeking to exempt from value-added tax (VAT) oil and petroleum products and various goods used by the poor.
House Bill No. 4704, filed by Reps. Emmi A. de Jesus and Luzviminda C. Ilagan, seeks to remove the 12% VAT on oil and petroleum products, as well as on canned goods, coffee, sugar, cooking oil, salt, laundry soap, detergent, firewood, charcoal, candles, "essential" drugs, noodles, garlic, vinegar, patis, soy sauce, toilet soap, fertilizer, pesticide, herbicide, swine and cattle feed, paper, school supplies, nipa shingles, cement, hollow blocks, construction nails, batteries, electrical supplies, light bulbs and steel wire.
Ms. Ilagan said by phone that these are goods which poor households use regularly.
But the Finance department has argued that the removal of VAT on oil alone will cost the government some P52 billion in foregone revenues.
"[It is] not advisable to give tax exemptions at a time when we have the lowest tax effort in Asia. Funds for social services and infrastructure will be severely curtailed," Finance Undersecretary Gil S. Beltran said via text, noting that the Philippines’ tax effort of 13.6% last year fell below the Southeast Asian average of 16%.