Ramos to relax new tax

Ramos to relax new tax

MANILA (AFP): President Fidel Ramos has agreed to exempt more sectors from the expanded value-added tax (VAT) passed last month in an apparent attempt to ease opposition against the new levy.

Finance Secretary Roberto De Ocampo said that in a meeting with congressmen and cabinet members yesterday, Ramos reiterated the VAT was an "important measure" as it was needed to fund local government projects.

But the government also agreed to exempt more sectors from VAT, including textbooks, religious articles and small cooperatives.

Ramos further agreed to exempt small enterprises from paying tax registration fees required for all businesses.

De Ocampo said government officials had been instructed to conduct dialogue with various opposition groups calling for the repeal of the VAT, which was supposed to raise some 8.3 billion pesos (US$296 million) a year.

Passage of the VAT was deemed crucial for Manila to shrink its deficits and obtain a new 684 million dollar credit facility with the International Monetary Fund (IMF).