Last week, a caller called to ask if gasoline has VAT or not. She said that when they filled their talk at one gasoline station, there was VAT indicated at the bottom of the receipt whereas in another gasoline station there was none. The radio announcer does not know and said they'll try to find out.

This week, another caller called the station to complain that they made some purchases in a grocery store and there was no mention about an VAT but after they have paid for the item and checked their receipt, there was VAT indicated at the bottom of receipt. The radio announcer said they will try to find out.

If the radio announcer who should have been up to date on the latest news and developments in the country cannot answer the question, given a week to try to find out and has no answer, how can we expect the general public, who rely on the media, to understand what is happening around us. Since the start of the year, the government through the Bureau of Internal has implemented the changes that will increase collection of taxes. Among the changes in the regulations they instituted is the requiring of invoices and receipts issued to reflect the actual value-added tax (VAT) being paid by the buyer.

Since most of the items being sold already includes VAT, what retailers would just do is to print on the invoice or receipts they issued the additional note of VAT and the amount. Eg. If one purchased goods worth a total of Php 110.00, the receipt will reflect in the totals the words to the effect:

VATABLE:   110.00
VAT:               10.00
Net:              100.00

If the items includes agricultural products which does not have VAT such as rice or vegetables, they will be summarized separately, eg. the customer purchases 66.00 worth of canned goods and 40 pesos worth of vegetables, the receipt may look something like:

GROCERY               32.00
GROCERY               22.00
GROCERY               12.00
VEGETABLE            40.00
SUB-TOTAL           106.00
VATABLE                 66.00
10% VAT:                   6.00
NON-VATABLE       40.00
NET:                       100.00

In short, there is no additional VAT being imposed on the purchase of the goods from the store. Apparently, the caller did not bother to try calculate her receipt and see if she paid any additional VAT on top of the price of the goods. And its easy to see if you are paying any additional by trying to buy just one piece of item and see if the amount you paid is the same as the price which is marked on the item.

As for the gasoline incident, its probably just that one gasoline station is using a Point-of-sale or POS machine which can automatically calculate the VAT whereas the other one does not or their cash register has not been reprogrammed yet. There are many business establishments and not as many cash register / POS vendors and could not go to all the store all at once to reprogram the units.

The government has a website regarding the reformed vat which can be found at: VAT Reform website and the page on About VAT can answer a number of questions about the VAT as well as provide contact numbers to the related agencies if they have more questions.

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Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved.