VAT rate cut possible if exemptions curbed — DoF

FINANCE Secretary Frederick D. Go said his department is seeking to avoid revenue-eroding measures, but added that the proposed cut in the value-added tax (VAT) rate is possible if accompanied by the removal of VAT exemptions.

- — Aubrey Rose A. Inosante

“The Department of Finance (DoF) is naturally predisposed not to want revenue-eroding measures. But of course, everything is possible,” he told reporters on the sidelines of a Palace briefing on Monday.

“Pwede naman (It’s possible). But we have to remove all the VAT exemptions,” Mr. Go said when asked whether he supported a reduction of the current VAT rate.

VAT is a 12% tax imposed on sales, leases, barter, and imports of goods and services. VAT collections account for around a fifth of the BIR’s total revenue.

House of Representatives and Senate legislators have floated a VAT rate of 10%, which could complicate government fiscal consolidation efforts.