MANILA – The Department of Finance (DOF) has proposed to presumptive president Rodrigo Duterte a comprehensive tax reform package which includes increasing the value-added tax (VAT).
The DOF suggested to the incoming administration to increase VAT to 14 percent from the current 12 percent.
It also proposed to expand the coverage of VAT to include senior citizens and persons with disability (PWDs).
The finance department also wants the next administration to repeal other laws providing VAT exemption.
Higher excise taxes on gasoline, diesel and other oil products are also suggested.
Under the tax reform package, government will provide incentive options available only to “export-oriented enterprises” and “strategic enterprises.”
“Provide options of four-year income tax holiday, 5 percent tax on gross income tax earned and 15 percent on net taxable income to export oriented enterprises, and 15 percent tax on NTI to strategic enterprises,” the DOF said.
The DOF said, to ease the tax burden, tax reform should also include reducing income tax rates to 25 percent from 32 percent, as well as imposing a P1 million income tax exemption ceiling for wage earners.
The DOF also wants to bring down corporate income tax to 25 percent from the current 30 percent in five years.
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