POISED to lose their exemptions from Value-Added Tax (VAT), Government Owned and Controlled Corporations (GOCC) will be given a subsidy from the P19 billion tax expenditures fund under the General Appropriations Act of 2018, the Senate proposed.
The proposal was put forward on Wednesday during the 15th public hearing by the Senate Committee on Ways and Means focusing on value-added tax provisions under the Tax Reform for Acceleration and Inclusion Bill. Under the proposed Tax Reform, GOCCs will no longer be exempted from VAT.
Among the organizations that will receive subsidies from the GAA are the Girl Scouts of the Philippines, Boy Scouts of the Philippines, Philippine Post Office, National Health Insurance Corp., National Dairy Authority, the Government Service Insurance System, the Civil Aviation Authority of the Philippines, the Philippine Deposit Insurance Corp., and the Veterans Federation of the Philippines, among others.
In earlier hearings, senators had opposed the lifting of the VAT exemption on GOCCs. According to Senate Ways and Means chair Juan Edgardo M. Angara, the shift from VAT exemption to GAA subsidy was a fair solution.
“The advantage there is that the government can book it as revenue,” he said, noting that it is just like putting money from “one pocket to another.”
However, Mr. Angara said that there is still much to be discussed. On Thursday, the committee will continue its deliberations on sugar-sweetened beverages and its earmarking to health promotion fund.
“There is still a lot of debate,” said Mr. Angara on the proposed tax on sugar-sweetened beverages. He added: “There’s no consensus yet on what will take the place of a volume-based tax. The consensus is the volume tax is a not a very targeted system. It tends not to distinguish between sweeter and less sweet beverages. The right incentives from manufacturers are not present in that system. We want to craft a system where manufacturers and consumers are incentivized to have a healthier lifestyle.” — Mario M. Banzon
