Bill seeks VAT threshold indexed to inflation

• A BILL filed by Senator Sherwin T. Gatchalian to amend the tax code will index the threshold for value-added tax (VAT) exempt taxpayers to inflation, adjustable every three years.
• Mr. Gatchalian, who chairs the Senate Ways and Means Committee, filed Senate Bill 1346, dated 27 Sept 22, which adjusts the tax administration rules via amendments to the National Internal Revenue Code of 1997.
• The start date proposed for the indexing exercise is 1 Jan 23.
• He also hopes to expand the number of banks eligible to receive tax payments to ease the process for taxpayers, who currently must transact at an authorized agent bank in the revenue district where they are registered.
• “For the benefit of our taxpayers, we need to simplify the process of paying taxes as we endeavor to enhance tax compliance and strengthen taxpayer’s rights,” Mr. Gatchalian said in a statement on 29 Sep 22.
• The bill seeks to remove the option to pay internal revenue taxes to a city or municipal treasurer with jurisdiction over the taxpayer, while eliminating the distinction between documentation and basis of sales of goods and services, which will then require a sales invoice for both.
• “The value of services sold and subsequently refunded or for which allowances were granted by a VAT-registered person may be deducted from the gross sales for the quarter in which a refund is made or a credit memorandum is issued,” bill stated.
• “Our bill seeks to modernize tax administration and establish mechanisms so that we can further improve and make tax collection more effective,” Mr. Gatchalian said. “We hope that these measures will further encourage our taxpayers to do their duty to pay proper taxes.”
• The bill, a priority measure of President Ferdinand R. Marcos, Jr., remains pending in the Senate Ways and Means Committee.
• The House of Representatives on 26 Sep 22 passed on third and final reading its counterpart bill, which its backers said would generate an estimated PHP73.1bn in additional revenue by 2027.

External Link : https://www.bworldonline.com/economy/2022/09/29/477672/bill-seeks-vat-threshold-indexed-to-inflation/