Hontiveros pushes to reduce VAT

FILE: Sen. Risa Hontiveros (Photo: Senator Risa Hontiveros/ Facebook)

MANILA, Philippines — Senator Risa Hontiveros is lobbying for a bill that seeks to cut down the value-added tax (VAT) from 12 to 10 percent in an attempt to moderate the effect of the newly-signed Tax Reform for Acceleration and Inclusion (TRAIN) law.

Hontiveros and Sen. Panfilo Lacson pushed for the reduction of the VAT during the discussions on the TRAIN law but it was opposed by the Department of Finance (DOF).

The lady senator said in an interview over ANC’s Headstart that the original VAT law of 2005 required only 10 percent, which she said higher than the eight percent average among Association of Southeast Asian Nations (ASEAN) member-states.

“The important thing, actually I wish it’s the bottom line for me, the most important reform that I was pushing together with Senator Ping is to bring down the VAT (value-added tax) from the current 12%, which was the original proposal of the Philippine Congress way back in 2005, when the VAT law was passed,” Hontiveros said in mix Filipino and English.

Hontiveros, the lone dissenter of the Senate version of the measure, believe that TRAIN “lost steam” as the people start to ‘feel the pain and trauma’ due to increases in electric bill and fare, and higher prices of basic commodities.

“Its original objective is to reform our tax system and to make the tax burden lighter especially in the poor and on ordinary people. But eventually, I will describe that it seems like the people are being hit by the train and we were hit by the train last year but only feel the pain this year,” the lady senator said.

Hontiveros added that once the gross revenue product of the Philippines reaches 4.5 percent, she could introduce new reduction of the VAT to a “reasonable” eight percent.

She also said that tax exemptions should come “down the road” after direct taxes become efficient, citing the policies of the neighbors in the region.

“There are other colleagues of mine in the Senate who are championing to cut exemptions, but I felt the critical tax reform, those who will meet the objectives of TRAIN originally, because tax reform for acceleration and inclusion should have been the lowering of the VAT to increase the buying power especially for the working people, to leave more money and profit at the end of the month, and to lift more Filipino families out of poverty,” Hontiveros said.