Thursday, September 01, 2005
Finance exec cites need to lift restraining order on R-VAT
FINANCE Undersecretary Emmanuel Bonoan cited the need to life the temporary restraining order (TRO), issued by the Supreme Court with regards to the implementation of the Reformed Value-Added Tax (R-Vat), within the month in order to immediately generate multi-billion additional revenues.
Bonoan, during the R-Vat Law Domestic Road Show held at the Davao Convention and Trade Center Monday, said that if the TRO will be lifted anytime within this month, a total incremental revenue of P10.45 billion will be generated.
And between P80 billion and P90 billion will be added to the national income for the entire year of 2006.
The R-Vat is an indispensable component of the government's fiscal consolidation program designed to expand the tax base, generate substantial incremental revenues, help reduce the fiscal deficit, and ensure debt sustainability in the medium term.
The R-Vat or Republic Act 9337 removes the Vat exemption of several formerly non-Vat-able sector of the economy. Thus, the burden of taxation is now shared more equitably.
Among the previously exempt transactions that are now subject to Vat are: medical services such as dental and veterinary services rendered by professionals; legal services; non-food agricultural products; marine and forest products; cotton and cotton seeds; petroleum products; passenger cargo vessels of more than 5,000 tons; work of art, literary works, and musical compositions; generation, transmission, and distribution of electricity including that of electric cooperatives; sale of residential lots valued at more than P1.5 million; sale of residential house and lot/dwellings valued at more than P2.5 million; and lease of residential unit with a monthly rental of more than P10,000.
"We are implementing the R-Vat by January 1 of 2006 if the Supreme Court will decide to lift the TRO and if it doesn't see the R-Vat as unconstitutional," he said.
And to further the revenues to be collected by the national government, Bonoan said, the DOF, particularly the Bureau of Internal Revenue (BIR), will continue to run after tax evaders and smugglers.
"We really have to increase our revenues if we are to address both the social and economic concerns of our country," he said. (JMM)
For Bisaya stories from Davao. Click here. (September 1, 2005 issue)
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