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Palace allows lawyers to get VAT exemption |
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(09 February 2004, Monday - The Manila Times)
By Arnold S. Tenorio MALACAÑANG cut lawyers some slack by allowing a bill exempting them from the value added tax (VAT) to lapse into law a few days ago. |
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A Department of Finance source said the bill exempting doctors, lawyers, and banks from the VAT lapsed into law on February 5. In place of the VAT, the law reverts to the gross receipts taxation (GRT) of financial institutions.
Although it supports the VAT-exemption of doctors as well as the reversion to GRT for banks, the finance department, however, is opposed to granting lawyers VAT-exempt status. Indeed, the DOF since the time of then finance secretary Jose Isidro N. Camacho has been urging Malacañang to veto a line in the bill granting this privilege to the legal profession. The DOF has argued that granting lawyers VAT-exemption goes against international best practice. Malacañang’s failure to back up the DOF on this issue is but the latest indication of weak executive support for fiscal reform. Earlier, Malacañang endorsed a legislative measure granting another wave of tax amnesty that would benefit businessmen. The Federation of Filipino-Chinese Chambers of Commerce is lobbying for the passage of this bill. The DOF, however, is opposed to the measure, which is pending before Congress. In opposing the bill, the finance department cited previous tax amnesties that generated only a pittance in terms of actual collections. Fiscal authorities have been critical of the many tax exemptions granted different sectors, especially since the confusion has abetted corruption in the ranks of revenue officials, and has led them to miss their targets. Worse, the grant of exemptions depends on the strength of lobby groups since no framework has guided fiscal authorities on the matter. Revenue leakage is partly to blame for government’s budget deficit, which is expected to stay below a P198-billion ceiling this year. Although a budget deficit can help boost the economy, the current situation of government borrowing to service a rising debt is bad since this puts a squeeze on social and other public services that could help raise incomes and generate additional jobs. home | latest news |
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