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ADB warns gov’t against move to hike VAT to 15%

ADB warns gov’t against move to hike VAT to 15%
By Ronnel Domingo
Philippine Daily Inquirer

MANILA, Philippines—The government should not raise the value-added tax to 15 percent as this, along with the corporate income tax being lowered further, would make the Philippine tax system more regressive, according to the Asian Development Bank.

In a policy note on the Philippines, the multilateral lender said the Philippines should rather raise excise taxes on tobacco, alcohol and gasoline to improve its tax effort or collections expressed as a percentage of total output (gross domestic product).

The ADB noted a standing proposal for another increase in the VAT from the current 12 percent and a further lowering of the corporate income tax to 25 percent from 30 percent would not improve the tax effort, which was pegged at 12.8 percent in 2009.

“The overall impact [of this scenario] on the tax effort is neutral,” the ADB said. “But if the [corporate income tax] is cut further to 20 percent, the tax effort decreases by -0.6 percentage point.”

Finance Dept to join Facebook, Twitter

Finance Dept to join Facebook, Twitter
GMANews.TV

To help go after tax cheats and smugglers, the Philippine Department of Finance (DOF) is looking to the public for assistance by signing up for social networking sites Twitter and Facebook.

On Thursday, Finance Sec. Cesar Purisima said the project is in cooperation with the Bureau of Internal Revenue and the Bureau of Customs.

Coming soon: crowdsourcing leads

“We will be launching it very soon. It is being developed,” Purisima said at a press briefing at the Department of Justice, where BIR Commissioner Kim Hacinto-Henares filed a tax evasion complaint against pawnshop chain owner William Villarica.

He said that on the upcoming Facebook page, the public can post photos of luxury cars, plush homes, and other properties of alleged tax evaders and smugglers.

“With their phones that have cameras, they can take photos of a nice car, a nice house, or a nice watch, so we can follow the lead… We will investigate then we’ll deliver to the Department of Justice,” said Purisima.

Social media and the government

The move comes in the wake of President Benigno Aquino III’s announcement in a press briefing last week that his administration will use social media as “feedback mechanisms” to get information directly from the public.

The DOF is not the first Philippine government agency to set up an active social media presence. Earlier this month, the Supreme Court also launched its own Twiter account, @kortesuprema. The account is currently deactivated, however, court administrator and spokeperson Jose Midas Marquez said that it is being fixed. – TJD, GMANews.TV

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