Imee Marcos seeks to expand list of VAT-exempt goods and services

Neophyte Senator Imee Marcos on Friday filed bills that would expand the list of goods and services that were exempted from the value added tax, a move that she claimed would help in poverty reduction.

“The country's tax laws also need to be amended further to make them truly responsive to the challenge of poverty reduction,” Marcos said in a press statement.

The senator wanted to make all medicines VAT-exempt, saying the Tax Reform for Acceleration and Inclusion (TRAIN) law only exempted maintenance medicine for diabetes, high cholesterol, and hypertension.

"The Duterte government may have passed the TRAIN law for ease of collection, but we now must try to make it more fair,” she explained.

She also sought VAT exemptions for the services provided by both state and private-run schools  to make the cost of school supplies and of schooling itself cheaper.

“As long as private educational institutions are duly accredited by the Department of Education, Commission on Higher Education, or the Technical Skills and Development Authority, such schools should be able to avail of VAT exemptions,” she argued.

The expense of running schools, passed on to students, could be reduced if all suppliers and service providers of educational institutions would also be exempted from VAT charges.

These VAT exemptions were intended to reduce the cost of education for low-income families and to give them "a real chance to escape the spiral of hand-to-mouth existence.”

Marcos also proposed VAT exemptions for the importation, printing, and publication of books, as well as school paper products consumed by students and teachers during the school year.

“All these education-related measures complement the law signed by President Rodrigo Duterte granting free college tuition. If free higher education is to be truly sustainable, we must exempt other educational expenses from VAT,” he said.

She also sought the removal of VAT charges on the sale of electricity and on the sale or importation of equipment and machinery directly used for power generation, transmission, and distribution to lower consumer costs.

"Small and medium enterprises would welcome this boost to their businesses," Marcos said.

She argued that even newspapers, magazines, reviews, or bulletins should be counted among the proposed VAT-exempt goods, as long as they were sold or subscribed to at regular intervals and were not mainly devoted to publishing paid advertisements. — DVM, GMA News