Recently, I watch a video in YouTube called Philippine Value added tax.

First, it talks about the VAT

applies to all persons who sells, barter exchange or lease goods, properties and render services. Second,
it defines the meaning of VAT.

There are 2 kinds of VAT: one is Input VAT, refers to the VAT the buyer pays on purchase from VAT –
register entities, and only VAT – register ed buyers are allowed to claim input VAT. Second would be
output VAT refers to the VAT the seller passed on to the buyer.

Third, 3 VAT:

1.) 12% for non-exempt domestic and imported goods and services.
2.) 0% for exports and export-related transactions.
3.) Exempt for selected goods and services.
Fourth, Exempt transactions and services. Sale or importation of: a. Agricultural and marine food
products in their original state, livestock and poultry. B. Fertilizers; seeds, seedlings and fingerlings; fish,
prawn, livestock and poultry feeds, including ingredients. Importation of: Personal and household
effects belonging to the residents of the Philippines returning from abroad and nonresident citizens
coming to resettle in the Philippines. B. Professional instruments and implements, wearing apparel,
domestic animals, and personal household effects. Service rendered by: Medical, dental, hospital and
veterinary services. Transactions which are exempt under international agreements to which the
Philippines is a signatory or under special laws. Gross receipts from lending activities. Lease of a
residential unit with a monthly rental not exceeding PhP12,800. Sale of real properties not primarily held
for sale to customers or held for lease in the ordinary course of trade or business.

Fifth. 0% for exports and export- related transactions. sales of goods - Sales to persons or
entities whose exemption under special laws or international agreements to which the Philippines is a
signatory effectively subjects such sales to zero-rate. Sale of services - Processing, manufacturing or
repacking goods for other persons doing business outside the Philippines.

Sixth, 12% for non-exempt domestic and imported goods and services. Sale of Goods or
Properties - All goods and properties (except those specifically exempt), including those subject to excise
tax, sold, bartered or exchanged are subject to a 12% VAT based on the gross selling price or gross value
in money. Importation of Goods - Importation of goods is subject to a 12% VAT based on the total value
used by the Bureau of Customs in determining tariff and customs duties, plus excise taxes, if any, and
other charges which shall be paid prior to the release of the goods from customs custody: Provided, that
where the customs duties are determined on the basis of the quantity or volume of the goods, the VAT
shall be based on the landed cost-plus excise tax, if any.

After I watch the video. I learn that everything we buy or use is taxed by the government which
is the 12% VAT. But the purpose of us paying the VAT is for the Government and to gain revenue and
rebuild the infrastructures, road etc. to make our country better, “cough for a while”. I hope those VAT
that we are paying is for rebuilding our country a better place not for those government to buy luxury
cars and watches for their own interest.