Ziezie

E-VAT (or EVAT) stands for expanded value added tax that is specific to the Philippines. It is also called the value added tax reform act and RVAT or the reformed value added tax. The E-VAT is imposed in the Philippines. It expands the coverage of the value added tax, which is a type of indirect sales tax levied on goods and services at each production and distribution step. It also increases the rate of corporate income tax and aims to reduce tax on particular petroleum products.

History

 Philippine president Gloria Macapagal-Arroyo signed the E-VAT bill in May 2005 and it was passed by the Philippine congress in the same month. It was implemented by the country on Nov. 1, 2005.

Coverage

 E-VAT extends to services provides by rental car companies, tourist buses, taxis, resorts, hotels, clubs and restaurants; imported meat and pest control products; trucking, shipping and airfreight; telegram, television, radio and telephone franchise; use of satellite transmission, films and cable television; feeds for aquarium fish, fighting cocks and race horses; property rights; non-life insurance and professional fees.

Aims And Expectations

 The aim of the E-VAT was to meet the budget deficit levels set by the IMF. President Fidel Ramos enacted the Republic act 7716 (or the new expanded VAT law) in 1994 to restructure the value added tax, widen its scope and enhance its administration. According to "Human Rights in Developing Countries," the E-VAT initially imposed a 10 percent tax on most services and goods. It was estimated that the E-VAT would result in approximately 5.5 billion pesos (approximately 124 million U.S. dollars) in additional revenues annually.

Advantages

 The E-VAT imposes a higher tax rate on goods and services, which translate to higher revenues for the government. These revenues can be used to improve the infrastructure, environment, education and health systems, and provide more jobs for the citizens. According to "The CIA...