Tuesday, January 17, 2006


The topic of Value Added Tax has always evaded the BAR. But there are certain things about VAT that are good to know like the new law on E-VAT or RA 9337.

RA 9337 removes the VAT exemption of several formerly exempt sectors of our economy such as
- medical services rendered by professionals
- legal services
- petroleum products, including sale and importation of raw materials for its manufacture
- non-food agricultural
- marine and forest products
- work or art, literary works, musical compositions
- cotton and cotton seeds
- coal and natural gas
- passenger cargo vessel of more that 5000 tons
- generation, transmission and distribution of electricity including that of electronic cooperatives
- sale of residential lot valued at more that P1.5 M.
- sale of residential house and lot/dwellings valued at more than P2.5 M
- lease of residential unit with a monthly rental of more than P10,000.

For the year 2005, the rate remains at 10% but it maybe increased to 12% starting year 2006 when certain conditions are met.

Sale of goods and services to government is subject to 10% VAT under the Tax Code. Further, before making payments to suppliers, government agencies acting as withholding agents are required to deduct and withhold a final VAT due at the rate of 5% of the gross payments thereof.

This act was implemented on November 1, 2005.

1 comment:

  1. Lawstude,

    I find the subject of taxation the hardest so i will appreciate it if u post more on this topic.