Osmena dubs Expanded Senior Citizen Law ‘idiotic’ tax exemption

July 16, 2010 12:01 pm 

MANILA, July 15 – Senator Serge Osmena III on Thursday described the recently-implemented Expanded Senior Citizen Act as one of the ‘idiotic’ tax exemptions which causes the government to lose funds needed for basic services like education and health for every Filipino.

”They (senior citizens) should not be exempted from the VAT,” Osmena said in a media forum in the Senate.

Osmena was referring to the 12 percent value added tax (VAT) which was removed from the 20 percent discount being given to the senior citizens under the implementing rules and regulations (IRR) of the Expanded Senior Citizen Act of 2010.

”The VAT is very efficient. I don’t care if they would get mad at me. I’m also a senior citizen. It’s a VAT everybody has to pay,” he explained.

”From the macro-finance point of view, if we give tax exemptions to everybody who feels they deserve a tax exemption, we will end up eating, eroding the revenue base of government and that means we won’t be able to educate enough of our children, pay our teachers enough, pay our doctors enough,” Osmena further explained.

Citing a study from the University of the Philippines (UP) college of economics, Osmena said the government has lost some P100 billion from “all those idiotic tax exemptions” for the last two years.

Osmena admitted that he voted against VAT implementation but clarified that he only opposed the increasing of the VAT from 10 to 12 percent.

”I only voted against increasing it because I have seen a lot of smuggling which cost the government some P150 billion revenues a year. This is a very beautiful tax structure that I've ever seen,” Osmena said.

Osmena said another idiotic tax incentives are those being given to big corporations who have no place to invest but in the country.

”You cannot seek too many exemptions because it makes the system more inefficient. The tax incentives given to big corporations should only be given if the big corporations are still not here,” he explained. (PNA)

DCT/jfm

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