Senator Risa Hontiveros filed a bill that seeks to cut the Value Added Tax (VAT) rate from 12% to 10 percent on Tuesday to ease the effect of the recently approved Tax Reform for Acceleration and Inclusion (TRAIN) law.
Senate Bill No. 1671 or “Bawas VAT” bill seeks to provide assistance for the lower economic deciles of the population affected by TRAIN law by reducing existing VAT rate to 10%.
“This efficiency should allow us to provide relief for the lower economic deciles of our population by lowering the VAT rate to 10 percent,” the senator stated.
She stated that once the VAT rate go down to 10% effective January 1, 2019 until it reaches 4.5% of GDP, it will exceed the revenue created by Thailand’s VAT rate of 7% there would be sufficient room to reduce the VAT rate to achieve full arrangement with the ASEAN norm of 8%.
It also seeks to align the country’s tax system with ASEAN region.
“The government said that the TRAIN law will be beneficial in the long term. Ika nga nila, the people must make short term sacrifices for long term gains. But the truth is, the TRAIN law has a big uncompensated impact on large families and individuals earning less than the minimum wage. We are asking people who have already suffered and sacrificed so much in life to make more uncompensated sacrifices. This is simply unjust and unsustainable,” Hontiveros said.
Hontiveros asked the public to strengthen people’s purchasing power and end deteriorating taxation.
“It’s time we strengthen the people’s purchasing power. It’s time for the public to cut clean from regressive taxation. It’s time to cut the VAT,” Hontiveros stressed. (Angelica Bobiles – PTV)
