The Vat In The Philippines Vs Usa

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Posted

My understanding of the VAT ( value added tax) is that it is a tax applied to an item as it is being produced. In the states, it is always included in the price. 

Here in the Philippines, I have noticed that it is added to the cost after the selection. This has been noticed in my restaurant bill at some restaurants. I'm used to paying a service charge and even sales tax but not VAT.

For instance, if the menu says that a meal cost 300 Pesos, I do not expect another 12% VAT added to my total bill. I think that is a sneaky way of jacking up the price. 

Better to call it sales tax or service charge. 

Ok, it's no big deal. Just curious why they call it VAT ( value added tax )  It's not the same.

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Posted

Welcome to the PI Grate :tiphat: , why do they call a restroom "comfort room" and all those other things that are strange to us. I personally try to remember that its not English but Taglish a lot of the time.

 

In your mind just change Comfort room VAT to Restroom  Sales tax and it all makes sense.

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Posted

Welcome to the PI Grate :tiphat: , why do they call a restroom "comfort room" and all those other things that are strange to us. I personally try to remember that its not English but Taglish a lot of the time.

 

In your mind just change Comfort room VAT to Restroom  Sales tax and it all makes sense.

Well Scott, to put in perspective it is not a comfort room. More of a discomfort for me. Not even a "rest" room, even if some might use it to rest. Perhaps an RM  ( Relief Room) might be more accurate. Thanks anyway  

(just my off the wall humor) 

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Steve & Myrlita
Posted

Actually here in the Philippines, the VAT is supposed to be included in the posted price. If they try to add the VAT after that, it may in reality be a kano long nose tax.

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Posted

 Many larger Stores Comply with the rules and Include VAT in Posted prices, this is because some goods are Different rates ( or they should be, on your OR it should state the VAT element included. However places like restaurants and utilities add after as a Whole but it should show clearly that VAT will be added after the Sub Total. Wholesale shops are good at this but there is sometimes no sign to tell you that the shelf price is not including VAT, these places need to be reported to the BIR.

 my wife ( A CPA) tells me that if there is no VAT mapping Certificate on View in the Premises, they should not be charging you VAT at all as they may well not be registered and is therefore fraudulently charging you VAT. 

 

JP :tiphat:

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Posted
My understanding of the VAT ( value added tax) is that it is a tax applied to an item as it is being produced. In the states, it is always included in the price.
No it isn't

say I, who have never been in USA   :lol:  

I don't know if it's state differences in USA, but some PRIVATE persons tell, when they are asked the cost in court:

-The price was xxxx plus VAT   xxxx.

Actually here in the Philippines, the VAT is supposed to be included in the posted price.
Ok, it's no big deal. Just curious why they call it VAT ( value added tax )
Basicly EACH step in business count VAT at WHOLE their selling price, but is allowed to DEDUCT the VAT they paid when they bought equipment, goods or raw material, so it's Value ADDED tax for EACH step,

BUT   :)   in Phils it's complicated by them with low revenue are EXTEMPT from the basic rule. They pay 3 % BUT are not allowed to deduct for any VAT they have paid.

(If I have understood it corect, this complicate it for the OTHERS too, because they are NOT allowed to deduct ANY VAT from such smaller suppliers/services, who don't SPECIFY their VAT...)

 

(The acounting of VAT to the BIR is realy crazy by the way.  From the companies above the minimum revenue to be extempt, BIR demands LISTS with ALL EACH transaction specified every month including information about each customer (I suppouse when it's between companies) so BIR can MATCH EACH POST with lists from other companies!!!   :1 (103): Don't BIR have anything better to do than harrass small companies like that? They demand much OTHER things too as if company owners don't have anything else to do than make information to BIR...  :bash:

(In my home country, the officials check ONLY when they suspect something, plus RANDOM checks at a FEW of all companies... In over 40 years they have NEVER checked my VAT. They have checked SOME parts of my business INCOME tax a few times, when they were confused    :)

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Posted

Ok, it's no big deal. Just curious why they call it VAT ( value added tax )  It's not the same.

 

 

In many countries it was previously called Purchase Tax. Then as with many things, Governments decided a good way to screw more money from us all, so Services were included, now to some a service is not a Commodity so they changed the name to Value tax that was added after completing any deal thus it then became the Value Added Tax. In other words a tax of a % of the Transaction.

 

Labour costs and such were never taxed before just say the Bricks the mason laid, now all is taxed. Bricks Mortar Time etc.

 

JP  :tiphat:

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Posted

To Jack Peterson,

 

Yes, this is how VAT works in the states. Every step of the way, everything is taxed from labor to time and  material, to overhead, etc, etc.

I understand this and it is all included in the final price to the consumer. The other tax that the consumer pays is the state sales tax where ever it applies. Some states, even some counties and cities it is higher than others. 

 

 

Labour costs and such were never taxed before just say the Bricks the mason laid, now all is taxed. Bricks Mortar Time etc.

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Posted

To Jack Peterson,

 

Yes, this is how VAT works in the states. Every step of the way, everything is taxed from labor to time and  material, to overhead, etc, etc.

I understand this and it is all included in the final price to the consumer. The other tax that the consumer pays is the state sales tax where ever it applies. Some states, even some counties and cities it is higher than others. 

 

 

Labour costs and such were never taxed before just say the Bricks the mason laid, now all is taxed. Bricks Mortar Time etc.

 

The USA does not have a VAT tax. There are many taxes during production of a product, such as income tax on labor and income tax on corporate profits. But there is no VAT tax.

 

Most US states have a sales tax which is added on to the purchase price.

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Posted

 

Ok, it's no big deal. Just curious why they call it VAT ( value added tax )  It's not the same.

 

I have always thought it should be called Value Subtracted Tax since increasing the price reduces the value for money.

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