THE World Bank stated the Philippines ought to broaden its tax base and take away some of existing exemptions at the fee-brought tax (VAT) to enhance revenue and address coverage and management gaps inside the gadget.
In a special segment of its lately launched Philippine Economic Update, it stated a huge and developing range of exemptions undermines the performance of the VAT.
“Some of those exemptions also create economic distortions. For example, most cooperatives are exempt from VAT, which creates an incentive for organizations to restructure themselves as cooperatives so as to lessen their tax liability, although restructuring isn’t economically efficient,” the Washington-primarily based multilateral lender stated.
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