MANILA - Senator Risa Hontiveros said Monday she sought to lower the value added tax or VAT rate to cushion the poor from higher commodity prices from the first tranche of tax reforms.
In her "Bawas VAT" bill, Hontiveros sought to bring VAT down to 10 percent from 12 percent. She said it would still be higher than the 8-percent average in Southeast Asia.
"The past dozen or so years, mas binabalikat ng mahihirap ang mas mataas na valued added tax (the poor have shouldered much of the VAT). So it will be reasonable, I believe, to reduce it finally to the 10 percent original proposed level by the first day of next year," she told ANC.
She said senior citizens, persons with disability, cooperatives, and socialized housing for the urban poor should still be exempted if the VAT rate is lowered. Exemptions on economic zones, however, should be reviewed.
Under Hontiveros' proposal, the VAT rate can still be lowered further to 8 percent in 2022.
Hontiveros said lowering the VAT rate would not hurt the administration's P8-trillion infrastructure program as the finance department expects tax reforms to generate P130 billion in revenues.