DOF Secretary Benjamin Diokno 

The value-added tax (VAT) being imposed in the Philippines is "under review". 

Thus, bared Department of Finance (DOF) Secretary Benjamin Diokno before the House Committee on Appropriations Thursday, Aug. 10, on the first day of the panel's briefings on the P5.768-trillion National Expenditure Program (NEP).  

Diokno told Nueva Ecija 3rd district Rep. Ria Vergara during interpellation the reason for the review is the "very low" yield of VAT, despite its high rate. 

"The value added tax is actually a proportional tax. At the moment we are reviewing our value added tax because it is one of the highest in this part of the world, yet its yield is very low, only 40 percent of what we’re supposed to collect," he said. 

"So we’re doing a study on the value added tax, which is a nice tax, to make it more effective and more high-yielding," added Diokno, a former Department of Budget and Management (DBM) secretary. 

VAT is equivalent to a uniform rate of 12 percent based on the gross selling price of goods or properties sold, or gross receipts from the sale of services. It is basically a consumption tax. 

When Vergara asked Diokno if lesser fortunate Filipinos under the Pantawid Pamilyang Pilipino Program or 4Ps could be exempted from VAT, Diokno said the particular tax is already "pro-poor" as it is. 

"Right now I think our value added tax is one of the best in terms of being pro-poor because we do not tax food in its original state. In other countries it is also being taxed by vat," he explained. 

He said food purchased from supermarkets or "palengkes" aren't taxed.