Rich seniors must ‘sacrifice’ tax exemptions, government says

ABS-CBN News

Posted at Aug 25 2016 10:35 AM | Updated as of Aug 25 2016 10:46 AM

MANILA – The government is asking affluent senior citizens to “sacrifice” some of their tax exemptions to help President Rodrigo Duterte reform the system and funnel more resources to uplift the poor, the head of his economic team said Thursday.

Value added tax (VAT) exemptions on “luxuries” like restaurant meals should be lifted to allow government to increase funding for targeted subsidies like the conditional cash transfer program, Finance Secretary Carlos Dominguez said.

"We are asking a little small sacrifice for building more of our country," Dominguez told a news forum.

"We are not raising revenue for the sake of raising revenue. We are raising revenues in order to invest in infrastructure, in education, in better agriculture services in the poorest areas of our country," he said.

Tax exemptions for senior citizens on medicine, raw food and education will remain, he said.

Dominguez said there were "many loopholes" in the 12-percent VAT system where annual collections from the levy are equivalent to 4.2 percent of gross domestic product.

Thailand, in comparison, also collects VAT equivalent to 4.2 percent of GDP but at a lower rate of 7 percent, he said.

Filipinos who are at least 60 years old enjoy a 12-percent VAT exemption on top of a 20-percent discount on certain goods under current laws.