The Value Added Tax in the Philippines

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In the Philippines, the Bureau of Internal Revenue (BIR) is the agency which collects revenues earned by the government from collecting taxes. Its functions include the imposing and collecting of all revenue taxes. It also include the enforcing penalties and fines and bestowing supremacy and power vested to it by the National Internal Revenue Code of 1997 (Ong, 2006).

The Value-Added Tax was created for the sole purpose of helping in subsidizing the poor. The VAT was created to help in sustaining, maintaining and improving public services being provided by the government to its citizens. Even if the Philippines is collecting the right amount of VAT at 12% rate, it still is not enough to help in sustaining the needs of every Filipino citizen. The sole purpose of the VAT is to help in sustaining the citizens, but what people see is worse than what they could have ever imagined. Public hospitals that do not give its patients the assurance of having a healthy body just because the premises of public hospitals worsen the condition of any sick patient because of the lack of staff, materials and the right equipment to be used. Public schools that do not give the students the education they ought to deserve just because the school equipment and school supplies being provided by the government would not suffice. The government should be using the revenue that they earned from the VAT in sustaining, maintaining and improving public services to be provided for the citizens of the Philippines (De Guzman, 2011).

A survey on Value-Added Tax has been conducted on students who are currently enrolled in De La Salle University under the Ramon V. Del Rosario College of Business and the School of Economics. Out of 45 respondents, only 1, from the School of Economics, said that he was not aware of the VAT being added to his daily consumption, but 45 of them from the Ramon V. Del Rosario College of Business and the School of Economics agreed that they are being affected by the VAT being placed in the goods they buy. One male student, 112, from the School of Economics quoted that he is being affected by the VAT because: “It is present in numerous goods being sold in the economy.” He also stated that he does not think that the revenue from the VAT is being fairly used because the government shows clear signs of questionable competencies which make him question where the revenue in VAT really goes. One male student as well, 114, from the School of Economics as well was asked the same question. Naturally speaking, he stated, he is affected because he is a consumer, but he does not question the government’s questionable competencies because he would rather set aside the thoughts of the government corrupting the revenue earned from the VAT and would like to believe that the government is putting them into good use.

One female student, 114, from the School of Economics stated that of course, she is affected by the VAT because of the things that she is buying. Like the first respondent, she does not agree that the government is fairly using the revenue from the VAT because she does not see visual improvements in our country. Another female student, 114, from the School of Economics as well would disagree with what the first girl respondent have stated. She, for one, is affected by the VAT as well because with VAT, she gets to purchase things in a higher price, but she thinks that the government is fairly using up the revenue from the VAT because for her, the improvements the government may have in store for the citizens may not be for the short-term only. The citizens might not feel the slight change or improvement that the government has done, but for her, surely there is.

One female student, 114, from the School of Economics stated that she is not that satisfied with what the government is providing for the society from the revenue of the VAT because with the current developments in our country's political systems, one is never sure where the revenue really is going and it is highly questionable. Another student, 114, Female from the School of Economics as well stated that she thinks that the government does not disclose how much revenue they get from VAT and this results to her questioning the actions of the government. Out of 45 respondents, only 5 agree that the government is fairly utilizing and using up the revenue from the VAT in sustaining, maintaining, and improving public services. Setting aside students from the School of Economics, some respondents include people from the Ramon V. Del Rosario College of Business. One female student, 112, stated that as a consumer, she as well is greatly affected by the VAT because it decreases her purchasing power. For her, she does not think that the VAT is being fairly used given that corruption in the government is still rampant. Asked if whether she would be willing to support the government if ever the government were to increase the VAT rate, she stated that she would not be willing to support the government due to the recent scandals. One male student, 113, from the College of Business as well also stated that for him, he is concerned of the VAT not because it would lessen his purchasing power, but because he has no idea where the revenue from the VAT really is going. For him, the VAT is not being fairly used by the government because the government has just too much corrupt officials who shall remain nameless.

Asked about the VAT and how the government is using it, only 13% of the respondents think that the VAT is being fairly used by the government while the other 87% said that it is not being used properly. Asked to why they think the revenue for the VAT is not being fairly used, majority of the respondents’ answers coincide with the idea of corruption. That no matter how much the government is planning to increase the rate of the VAT, there will be no Economic growth in the Philippines. It is not how much the government will increase the VAT or how much the government will increase its budget, but it is about how the government will utilize the revenue they have collected from the VAT. Unfortunately, due to corruption, people are not that willing to support the government if in future time the government wishes to increase the VAT. Based on the survey results, the respondents’ answers were somewhere that fall between positive and negative. A part have had a positive view towards the VAT, while another part have had a negative view regarding the VAT.

The Overall Effect of Value-Added Tax (VAT) on DLSU students

The Value-Added Tax (VAT) has a negative impact on DLSU students due to the fact that almost all the respondents were aware of the VAT and VAT affects their everyday consumption in the sense that they are more conscious of the things they are buying.

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