Professionals, others get new reprieve on VAT

The House and Senate committees on ways and means agreed yesterday to give another year of relief to banks, professionals, actors, talents, directors, broadcasters and brokers from paying the 10-percent value added tax.

The tax relief was reached at the bicameral conference committee to reconcile conflicting provisions of the House and Senate measures seeking to defer the imposition of VAT on banks and professionals.

With the agreement, the professionals, movie-personalities, broadcasters, banks and brokers would be paying the 10-percent VAT only on Jan. 1, 2001.

The banking sector and even professional players and coaches from the Philippine Basketball Association have been lobbying for the deferment of their VAT payment. The banks argued that the imposition of VAT at this time would hinder the faster recovery of the economy and could even drive the cost of bank transactions up. The VAT would be passed on by banks to their clients, and would be paid in every transaction.

The Bureau of Internal Revenue has failed to come up with implementing guidelines on the coverage of banks and professionals thus delaying their coverage.

Sen. Juan Ponce Enrile, chairman of the Senate committee on ways and means, added, however, that stock, real estate, commercial customs and immigration brokers, will be paying a seven-percent privilege tax this year.

He explained that the brokers would merely revert to the tax they used to pay prior to the imposition of VAT.

The government collected around P400 million in VAT from brokers in 1999, and about P390 million, in 1998.