Philippines gets boost with VAT law ruling
The Philippine high court on Tuesday upheld the constitutionality of the country’s new value-added tax law, the centrepiece of president Gloria Macapagal Arroyo’s fiscal reform programme, in a move that should boost investor confidence.
The ruling paves the way for the implementation of a key element of Mrs Macapagal’s effort to cut budget deficits and curb heavy government borrowing that holders of Philippine sovereign bonds fear could lead to an Argentine-style debt default. The tax is set to take effect on November 1.
The supreme court decision “will help reduce the fiscal deficit and allow more resources for job-creating infrastructure and the delivery of key services,” said Gary Teves, finance secretary.
The law, which expands VAT to include petrol and power, raises the tax rate from 10 per cent to 12 per cent from 2006 and boosts the corporate income tax rate from 32 per cent to 35 per cent. The tax is estimated to boost government revenue by 80bn pesos a year.
Mrs Macapagal wants the budget deficit, which was 187bn pesos last year and expected to be 180bn pesos this year, to be eliminated by 2009 or 2010.
US envoy backs Indian switch to VAT
West Bengal’s Marxist finance minister Asim Dasgupta has found an unlikely ally in his zeal to implement value-added tax (VAT) across India.
The US Consul General in Kolkata, Henry V Jardine, said India must create a true national market, among other things, if it is to attract the huge investments it requires.
“India’s ability to implement a national VAT and remove fiscal and regulatory barriers to interstate trade will create true national markets of a size and scale necessary for significant business commitments,” Jardine told members of the Indo-American Chamber of Commerce on Wednesday.
Incidentally, the US is one of the few nations in the world that does not have any VAT, and Dr Dasgupta’s opponents had highlighted this fact during the public debate that raged preceding the switchover to VAT.
Dr Dasgupta, an MIT-trained economist, is also the chairman of the empowered committee of state finance ministers on VAT.
Jardine said the biggest challenge for India now is to create the world-class infrastructure that is required for sustained higher growth and rural development.
Apart from a national VAT, the government should also ensure full protection for intellectual property rights, Jardine said.
8/2/2005
Revenue agencies urged to widen tax net
Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, on Friday stressed the need for the country to improve upon its revenue generation by enhancing the service delivery of the revenue agencies and widening of the tax net. He said government was committed to developing an effective and efficient tax system that had the ability to raise sufficient revenue for national development.
A statement issued by the Public Relations Unit of the Ministry of Finance and Economic Planning said the Ministry of Finance had noted with concern a publication in sections of the media entitled, “Government must reduce Value Added Tax (VAT),” attributed to Mr Baah-Wiredu.
The statement said the Minister enumerated a number of problems facing the VAT secretariat in particular including, registration and collection of tax from operators within the informal sector and did not categorically say that government must reduce the VAT rate. It said Mr Baah-Wiredu called for widening of the tax net to include more people in the informal sector, adding that perhaps if this was done it was possible to reduce the level of taxation in the country.
More: ghanaweb.com
7/15/2005
CHAPTER - I : PRELIMINARY : Punjab Vat Act 2005
CHAPTER - I : PRELIMINARY
Short title and commencement.
1. (1) This Act may be called the Punjab Value Added Tax Act, 2005.
(2) It shall come into force from the 1st day of April, 2005.
Definitions
2. In this Act, unless the context otherwise requires,
(a) account books means record of business transactions and includes accounts, registers and documents maintained in any manner including electronic medium;
(b) appointed day means the date on which this Act comes into force;
© business includes -
(i) any trade, commerce, manufacture, adventure or concern whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make profit and whether or not any profit accrues there from; and
(ii) any transaction in connection with or ancillary or incidental to such trade, commerce, manufacture, adventure or concern;
CHAPTER II : INCIDENCE AND LEVY OF TAX : Punjab Vat Act 2005
CHAPTER II : INCIDENCE AND LEVY OF TAX
Incidence of tax
6. (1) Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (a) of sub-section (3), shall be liable to pay tax under this Act by way of VAT on the taxable turnover.
(2) Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (b) of sub-section (3), shall be liable to pay tax under this Act by way of TOT on the taxable turnover.
(3) For the purpose of this section, the expression taxable quantum means-
(a) for registration as a taxable person for VAT -
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CHAPTER III : LEVY OF PURCHASE TAX : Punjab Vat Act 2005
CHAPTER III : LEVY OF PURCHASE TAX
Levy of purchase tax on certain goods
19. (1) Notwithstanding anything contained in this Act, there shall be levied VAT on the taxable turnover of purchase of the goods specified in Schedule-H at the rate applicable to such goods as per the Schedules.
(2) The tax shall be leviable on the first purchase of these goods from within the State. In case of Milk, however, first purchase shall be, when purchase is made by a manufacturer of taxable goods:
Provided that on subsequent sales of such goods, VAT on sale price shall be leviable as per the provisions of this Act.
(3) Subject to the provisions of this Act, the purchaser of the goods, specified in Schedule-H, shall have to be registered for VAT.
(4) The purchase tax paid by a taxable person, shall not be admissible as input tax credit, unless the goods are sold within the State or are used for manufacture of taxable goods in the State for sale or are sold in the course of inter-State trade or commerce or in the course of export.
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CHAPTER - IV : REGISTRATION : Punjab Vat Act 2005
CHAPTER - IV : REGISTRATION
Persons liable to register
21. (1) No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act.
(2) Every person required to be registered under sub-section (1), shall make an application for registration, within a period of thirty days from the date when such person becomes liable to pay tax under this Act, in the prescribed manner to the designated officer.
(3) If the designated officer is satisfied that the application for registration is in order, he shall, in accordance with such manner and on payment of such fee, as may be prescribed, register the applicant and grant him a registration certificate in the prescribed form:
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CHAPTER-V : PROCEDURE AND ADMINISTRATION OF TAX : Punjab Vat Act 2005
CHAPTER-V : PROCEDURE AND ADMINISTRATION OF TAX
Returns
26. (1) Every taxable person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.
(2) Every registered person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.
(3) Every person shall, in such manner, as may be prescribed, pay into a Government Treasury or any bank authorized to transact Government business or at the District Excise and Taxation Office, the full amount of tax due from him as per provisions of this Act and shall furnish along with the returns, receipt from such Treasury or Bank or District Excise and Taxation Office, as the case may be, showing the payment of such amount:
Provided that no payment of such amount shall be accepted at the District Excise and Taxation Office, except through a bank draft or crossed cheque drawn on a local Scheduled Bank in favour of the designated officer.
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CHAPTER-VI : PAYMENT AND RECOVERY OF TAX : Punjab Vat Act 2005
CHAPTER-VI : PAYMENT AND RECOVERY OF TAX
Due date of payment
33. Value Added Tax or Turnover Tax due or payable under this Act, shall be paid,-
(a) in the case of a taxable person whose gross turnover exceeds rupees one crore in the previous year, on monthly basis by such date, as may be prescribed;
(b) in the case of a taxable person whose turnover is less than one crore in the previous year, by the date, the return for such a period is required to be filed or as may be prescribed;
© in case of tax due as per assessment made under this Act, by the date, specified in the notice of demand or within a period of thirty days of the order, which ever is earlier;
(d) in the case of turnover tax payable by a registered person under this Act, by the date, the return for the period is required to be filed;
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CHAPTER VII : REFUND : Punjab Vat Act 2005
CHAPTER VII : REFUND
Refund of tax
39. (1) Subject to the provisions of this Act and the rules made thereunder, the Commissioner or the designated officer shall, in such manner and within such period, as may be prescribed, refund to a person, the amount of tax, penalty or interest, if any, paid by such person in excess of the amount due from him and also the excess of input tax credit over output tax payable under this Act. The refund may either be by refund voucher or at the option of the person, by refund adjustment order as may be specified:
Provided that, the Commissioner or the designated officer shall first apply such excess amount towards the recovery of any amount due in respect of which a notice under section 29 has been issued or any amount, which is due, but not paid, as the case may be, and shall refund the balance, if any.
(2) Where any refund is due to any taxable person or registered person according to the return furnished by him for any period, such refund may provisionally be adjusted by him against the tax due and payable as per the returns furnished under section 26 for any subsequent period:
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