Final Requirement TAX Santos Daniel D.

Republic of the Philippines
BATANGAS STATE UNIVERSITY

COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND
INTERNATIONAL HOSPITALITY MANAGEMENT
CITE Building, Pablo Borbon Main 1, Rizal Avenue, Batangas City
Let’s Talk
About VAT!
Submitted by: Daniel D. Santos
BSMA 3201
18-51070
Final Requirement on TAX 302
Mr. Mark Paul Ramos


COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS
AND INTERNATIONAL HOSPITALITY MANAGEMENT
Table of Contents
I. About the Paper

II. Profile of the Interviewer
III. Profile of the Interviewee
IV. Narrative of the Interview
a. Knowing more about the situation during pandemic and perspective of the
Interviewee regarding the VAT. Includes the following questions
i. Are you employed?
1. If yes, is your income sufficing your needs?
2. If no, is your last job’s income sufficing your needs?
ii. How do you budget your wages every month?
iii. What do you notice on the prices of the products in the Philippines?
iv. What do you know about VAT?
v. Is the VAT affecting you as a citizen?
vi. Given the chance to talk on national TV regarding your situation
during COVID19 pandemic and the effects of VAT in your life, what
would you say?
b. Owning the floor by Interviewer regarding the Idea of VAT. Includes the
following topic.
i. The current status of the employment rate in the Philippines
ii. The Idea of VAT.
iii. What do VAT give the people in return?
iv. Why do VAT is increasing?
v. Is VAT an anti-poor or pro-Filipino action?
vi. What is the Interviewer’s own opinion regarding the topic?

V. Closing the Interview.

VI. Conclusion
VII. Reference and Acknowledgement
I. About the Paper
It was stated on the Congressional Research (2021) of Unemployment Rates

During the COVID-19 Pandemic the Coronavirus Disease 2019 (COVID-19)
pandemic has had a significant effect on labor market metrics for every state,
economic sector, and major demographic group. Employment rate picked-up at 90.0
percent this July 2020 compared to the record low of 82.3 percent in April 2020.
However, it remains lower than the employment rate of 94.6% in the same month a
year ago. About 41.3 million Filipinos were employed in July 2020, 42.5 million in
July 2019, and 33.8 million in April 2020.
These data are very relevant to the topic of understanding the effects and burden
of the VAT in every citizen because it is a factor that will pull the family down who
have low-income once more. Because lower-income households spend a greater
share of their income on consumption than higher-income households do, the
burden of a VAT is regressive when measured as a share of current income: the tax
burden as a share of income is highest for low-income households and falls sharply
as household income rises. Because income saved today is generally spent in the
future, the burden of a VAT is more proportional to income when measured as a

share of income over a

lifetime. Even by a lifetime income measure, however, the burden of the VAT as a
share of income is lower for high-income households than for other households. A
VAT does not tax the returns from new capital investment, and income from capital
makes up a larger portion of the total income of high-income households.
Using a method more reflective of lifetime burdens, Eric Toder, Jim Nunns, and
Joseph Rosenberg (2012) estimate that a 5 percent, broad-based VAT would be
regressive at the bottom of the income distribution, roughly proportional in the
middle, and then generally regressive at the top. The VAT would impose an average
tax burden of 3.9 percent of after-tax income on households in the bottom quintile of
the income distribution. Yet, households in the top 1 percent of the income
distribution would only have an average tax burden of 2.5 percent.
In this paper, the interviewer will gather new information on how do a simple
citizen look at the idea of VAT and to the drowning rates of unemployed Filipinos.
The author will only use the data gathered to interpret it for educational purposes
only.
II. Profile of the Interviewer
Name: Daniel D. Santos
Age: 21 years old
Marital Status: Single
Educational Attainment: Attending College
School: Batangas State University


Program and Year: BS Management Accounting- Third Year

If Working:
Company: ACADSOC
Position: ESL Tutor
III. Profile of the Interviewee
Name: Daniela Mariz Santos
Age: 26 years old
Marital Status: Single
Educational Attainment: High School Graduate
School: Sta Teresita National High School
Program and Year:
If not Working, please include your last Job:
Company: Glorrietta Ayala Mall Center
Position: Sales lady
Income per month: “The interviewee refused to give this information.”
IV. Narrative of the Interview
Last December 25, 2020, Mr. Daniel Santos invited her sister, Daniela Mariz Santos to
an interview that talks about the VAT. He explained that the interviewer will have limited

time to ask the interviewee these following questions. Both sides may use any language
which they are comfortable to channel their thoughts. The written conversation in this
paper will be verbatim as long as the author can provide it.
The interviewer firstly asked Miss Mariz if she is employed right now to assess the
following question is her income is sufficing her essential needs. And the interviewee
answered the question very willingly, “Yes, I was a Sales lady. 3 years din, yung shifting
(ng work) ay sobrang kakaiba, from being an operator of a big machine sa isang
company sa Lipa, bigla akong napasok sa paggaganito (being a sales lady). Bukod sa
difference ng pagod and the environment, mejo big din and pagkakaiba sa sweldo and
income spending. Nagkakasya naman, kaso doble effort kase before, I was living with
my parents, tapos nung nag Manila na ako, I have to rent a Condo tapos lahat ng
gastos (ay) salo ko. Pero mas Malaki ang sahod and mas hindi nakakapagod compared
sa last job ko. But I left it also, dahil ng pandemic. Mas wise na mag resign ako dun
kesa sa ipilit na mag work tapos pwede pa akong magkasakit.”
After Miss Mariz telling her answer, the interviewer became curious on how does
she budget her wages every month.“Syempre, unahin natin mga bills. Kuryente, ilaw,
WIFI tapos gastusin sa school. Hindi lang naman ako nagtatrabaho nu’n sa pamilya.
Actually, hindi ko kayang bayaran yan lahat alone. Syempre kailangan rin bumili ng mga
pagkain, mga bilihin na kailangan sa araw-araw na maya’t maya na ring nag taasan ang
presyo. To budget my income, iisipin ko muna “alin ang dapat mabayaran na agad?”
then saka na ang iba, maswerte kung makabili ako something for myself. Nawala na
ang savings sa utak ko kase ang mahalaga ay yung makasruvive araw-araw during this
pandemic, saka na ang future muna.” she said.
“What do you notice on the prices of the products in the Philippines and its VAT?”
the interviewer asked. “Sabi ko nga, tumataas at nakakalungkot lang dahil sobrang

apektado kami. Lalo na ako na walang trabaho ngayon, problema ko na nga ang
pagkukunan tapos tumaas pa ang bilihin.” Miss Mariz said.
And because Mr. Daniel have asked the initial questions, he started asking those
who will hit his target. “What do you know about VAT?” According to Miss Daniela, “Ang
VAT ay tax na pinapatong sa bilihin. Kaya alam ko na kahit sa pagbili ng shampoo, nag
aambag ako sa kaban ng bayan dahil may Tax yun.”
He also asked if the VAT is affecting her as a citizen? And she answered it, “Oo
naman, alam ko naman na ang Tax ay ang tumutulong sa bayan na makaahon at
umunlad, pero minsan hindi ko maramdaman. Mas dama ko pa yung hirap. Dati, sa
isang libo makakabili ka na ng maraming pagkain at gamit sa bahay, samantalang
ngayon maswerte ka na kapag nakapag uwe ka ng dalawang kahon galing sa grocery
store. Yang mga piattos nga dati, mura lang yan.” Mr. Daniel Santos also wanted to
know the answer on How does Ms. Daniela compute her VAT every day. “Honestly,
hindi ako masyadong well-educated pagdating sa Taxes natin. Basta ang alam ko may
tax na kasama ang bilihin at yun ang isa sa dahilan kung bakit nagmamahal sila.” she
said.
After gathering those data from the interviewee, Mr. Daniel started on sharing his
knowledge about Taxes, especially on VAT. He included the following topic.
He read the current status of the employment rate in the Philippines that he got on the
official page of PSA.
Employment rate in January 2021 stood at 91.3 percent, which is the same as the
October 2020 rate. This means that 41.2 million Filipinos were employed out of 45.2

million Filipinos in the labor force in January 2021. This estimated rate is lower than the
reported 94.7 percent in January 2020.
According to him, VAT is the short term for Value-added tax. It is a type of indirect tax
levied on goods and services for value added at every point of production or distribution
cycle, starting from raw materials and going all the way to the final retail purchase.
“Kagaya ng sabi mo ito ay nasa bilihin natin kagaya ng coke o shampoo.”
He asked the interviewee if what does VAT give the people in return. VAT is used to
finance public and state expenditures. If our Government has introduced social policy
and economic policy with public services like basic social security/welfare, housing
benefits or child benefits in order to reduce poverty, with state support for business
start-up in order to generate new jobs to combat unemployment or with methods of
Keynes' anticyclical fiscal policy, these expenditures have to be funded and taxes like
"value added tax" can be used to fund these expenditures. So value added tax can be a
valuable contribution to improve a national socio-economy, if it's used properly by the
acting leaders of the country.
Why do VAT is increasing? Our government plans to increase the value-added tax or
VAT on goods and services from 12 percent to 15 percent and raise the excise tax on
fuel from P4.53 a liter of gasoline to P10 a liter to fund President Rodrigo Duterte’s first
national budget of P3.35 trillion, which is 11.6 percent higher than this year’s spending
plan. Congress is also set to tax the rich more and lower the income tax on wage
earners and the middle-income bracket from 32 percent to 25 percent, which could
result in government losing P92 billion a year in tax collections.

The interviewer ended the interview by answering the question, “Is VAT an anti-poor
or pro-Filipino action?” and for him “As a working student who are also experiencing
both academic and economic struggle in my life, I can say that VAT is an anti-poor and
selfish movement for our Country. This pandemic has put everyone on the hardest
situation that they could face but I believe that those people who are within the poverty
line are the ones who are suffering the most. Blowing unemployment rate”
V. Conclusion
What is the Interviewer’s own opinion regarding the topic? He does believe that
people of the Philippines should read and understand our rulings especially when it is
related with Taxes. We are the stakeholders of the country, being informed is powerful.
And our voices are very important and we should not be afraid or tired on voicing out
our concerns. VAT may not always be the talk of the town but we will always be
encountered these every day. We should educate ourselves and promote proper
application of laws and regulations governing Business and Transfer Taxes. The
concept of taxation is also important to businesses because governments can fund this
money back into the economy in the form of loans or other funding forms. Taxes help
raise the standard of living in a country. The higher the standard of living, the stronger
and higher the level of consumption most likely is.

VI. Photos for Documentation



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Republic of the Philippines

BATANGAS STATE UNIVERSITY

Final Requirement on TAX 302

Mr. Mark Paul Ramos

BATANGAS STATE UNIVERSITY

I. About the Paper

BATANGAS STATE UNIVERSITY

V. Closing the Interview.

I. About the Paper

It was stated on the Congressional Research (2021) of Unemployment Rates

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

II. Profile of the Interviewer

Name: Daniel D. Santos

Age: 21 years old

Marital Status: Single

Educational Attainment: Attending College

School: Batangas State University

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

Position: ESL Tutor

III. Profile of the Interviewee

Name: Daniela Mariz Santos

Age: 26 years old

Marital Status: Single

Educational Attainment: High School Graduate

School: Sta Teresita National High School

Program and Year:

If not Working, please include your last Job:

Company: Glorrietta Ayala Mall Center

Position: Sales lady

Income per month: “The interviewee refused to give this information.”

IV. Narrative of the Interview

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

BATANGAS STATE UNIVERSITY

VI. Photos for Documentation

BATANGAS STATE UNIVERSITY

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