Philippines Proposes VAT Reduction to 10% to Combat Inflation and Boost Economy

• House Bill 4302 proposes reducing VAT from 12 percent to 10 percent
• Authored by Rep. Leandro Leviste of Batangas
• Aims to ease inflation and lower prices for Filipino consumers
• Expected to spark debates in Congress due to potential revenue impact
• Leviste argues increased consumption and tax compliance could offset revenue loss
• Philippines has the highest VAT rate in Southeast Asia at 12 percent
• Bill includes a safeguard clause to restore VAT to 12 percent if needed
• Inflation is a top concern among Filipinos
• Measure could reduce VAT collections by over P200 billion annually
• Estimated savings of P7,000 per household each year
• Leviste states the bill makes the tax system more progressive
• VAT collections have significantly increased since 2005

Source: philstar.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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