DoF Wants VAT Exemption to Senior Citizens Repealed

Article excerpt

MANILA, Philippines - The Department of Finance (DoF) has formally proposed to Congress the repeal of value-added tax (VAT) exemption of senior citizens' purchases of goods and services.The fiscal authority agency explained that instead of VAT exemption, Congress may consider to increase senior citizens' discount rate to 30 percent from the current 20 percent."DoF believes that raising the discount rate to 30 percent already addresses the concern of senior citizens that the VAT has eroded the benefit of the discount. More importantly, adjustment in the discount rate minimizes revenue loss, prevent VAT leakages and protect the VAT base," the agency said.The DoF also cited that consumption tax exemption provided for senior citizens and other revenue eroding measures have put pressure for the government to raise VAT rate anew.Aside from possible VAT rate hike, the DoF also said the main benefactor of VAT exemption are those middle-and high-income senior citizens who have the ability to pay for hotel and resort services. …