PWDs, poor to get social protection from tax plan

MANIA – Indigent senior citizens and persons with disabilities (PWDs) along with low-income electricity consumers and small entrepreneurs will be protected through direct and indirect social protection measures under the tax reform program submitted last month by the Department of Finance (DOF) to the Congress.

Finance Undersecretary Karl Kendrick Chua said the DOF is now looking at lifeline subsidies for low-income electricity consumers to “protect” them from the impact of the proposed increase in the excise tax on petroleum products.

He said the social protection measures that the DOF is now fine-tuning with other government agencies extends to small and micro enterprises, as the value-added tax (VAT) threshold on their goods and services would be increased from the current P1.9 million to P3 million under the DOF-proposed tax plan – dubbed the Tax Reform for Acceleration and Inclusion Act.

“The protection really comes from the increase in their VAT threshold to P3 million so that the micro and small enterprises with gross sales of at most P3 million will not be affected by the broadening of the (VAT) base. They will of course still pay their percentage tax,” said Chua, who is the DOF’s concurrent chief economist.