MANILA - The government could lose nearly P10 billion this year to people posing as senior citizens to avail of value added tax (VAT) exemptions, a finance official said.
President Rodrigo Duterte's economic team is pushing for the lifting of VAT exemptions for seniors on luxuries like travel and restaurant meals as part of a tax system overhaul.
Citing a World Bank study, finance undersecretary and chief economist Karl Kendrick Chua said P4.9 billion to P7.1 billion was lost due to leakages from VAT exemptions for seniors in 2012.
Taking into account the growth in consumption since 2012, Chua said P6.6 billion to P9.6 billion could be lost to abuse of the exemptions.
“We are proposing to really target the benefits only to the poor and the vulnerable, so that we avoid the leakages which is very rampant in our estimate,” Chua said.
Duterte's tax reform initiative involves lifting some VAT exemptions and widening of the scope of the VAT and imposing taxes on petroleum and sugary drinks to offset a planned reduction in income taxes.