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Sunday, January 19, 2003
Cabaero: Tax drama
By Nini B. Cabaero
Beyond 30
Once again, the move to impose the 10-percent value-added tax (VAT) on actors, lawyers, doctors and other professions took center stage. I say “once again” because it wasn’t the first time that these sectors lobbied before national legislators for a law postponing the imposition of VAT on them.
A review of the VAT history showed that this advocacy to spare them of the 10 percent tax has been going for several years, like a drama series that wouldn’t go away.
Republic Act No. 9010, otherwise known as “An Act to Further Defer the Imposition of the Value Added Tax on Certain Services, Amending for the Purpose Section 5 of RA 8424, as Amended by RA 8761,” defers the imposition of VAT on certain services until December 31, 2002.
Covered by the postponement, according to the law, are:
(a) Services performed in the exercise of profession or calling subject to the professional tax as provided for under the Local Government Code of 1991, and professional services performed by registered general professional partnerships;
(b) actors, actresses, talents, singers and emcees;
(c) radio and television broadcasters, choreographers;
(d) musical, radio, movie, television and stage directors;
(e) professional athletes;
(f) services rendered by banks, non-bank financial intermediaries, finance companies and other financial intermediaries not performing quasi-banking functions; and
(g) services rendered by stock, real estate, commercial, customs and immigration brokers.
Based on the RA 9010, the VAT on these services should have been imposed starting last Jan. 1. But, as the story line goes, that is not to be because some members of Congress are pushing for another deferment (another run of the drama series?).
The VAT Law took effect on Jan. 1, 1988 and the imposition of VAT on these services was approved in RA 7716 on May 5, 1994. It was not implemented.
Tax law data found on the Internet showed that RA 8241 on Dec. 20, 1996 saved the day for these sectors. It deferred the imposition of VAT on these sectors to Jan. 1, 1998.
Then came Jan. 1, 1998, but the imposition of VAT on these services was again postponed, courtesy of a new law, until Dec. 31, 1999. Then came another postponement to Jan. 1, 2001. Then another until Dec. 31, 2002.
The fate of the VAT on these sectors is turning out to be like a bad soap series. There’s no telling when or how it will end.
(Ms. Cabaero can be reached at e-mail address ninicab@sunstar.com.ph)
(January 19, 2003 issue)
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