VAT TO THE RESCUE
VAT collections to soften brunt of oil excise tax hike suspension
Manila — Value added tax (VAT) collections from petroleum products are expected to partially compensate for lost government revenues arising from a suspension of the oil excise tax hike scheduled for 2019.
Finance Undersecretary Gil Beltran told reporters Friday, October 19, that although the government is projected to lose about P41 billion from the expected suspension of the second installment of the tax increase, the actual loss will not be that big.
“We will lose P41 billion from excise but we will gain P14 billion from the VAT, so there’s a net loss of about P27 billion,” he said.
The Department of Finance (DOF) official also said a task force will be created to look into proposed programs that can be postponed or cancelled, to limit expenditures and ensure that the budget gap will still be about 3.2 percent of the gross domestic product (GDP). “One of the things we are looking at is the less priority expenditures like the travels, which are not very necessary, and some renovations,” he said.
Beltran added that the Department of Budget and Management (DBM) may opt to disapprove some appointments by the bureaucracy since funds for miscellaneous personnel is costly to the government. “They have control over the appointments in the bureaucracy so they have the option not to approve certain appointments by the bureaucracy,” he said. /
We will lose P41 billion from excise but we will gain P14 billion from the VAT, so there’s a net loss of about P27 billion GIL BELTRAN Finance Undersecretary