M7PLR Value Added Tax On Importations Peralta, Claricel Joy A. Bsa 2D

M7PLR
Value Added Tax on Importations
PERALTA, CLARICEL JOY A.

BSA 2D
1. What concept did you learn today?

The concept I learned today is all about tax rules, illustrative cases, and procedural
solutions to aid application and stay on the path to mastery. I was able to determine the
application of tax rules on landed cost, custom and tariff duties on importation. I was also able to
identify legitimate expenses attributable to importation. Lastly, I have chance to know the tax on
importation of merchandise.
First, the tax rate and its formula, wherein, he value-added tax rate is twelve percent
(12%). The tax is applied on either in the landed cost, that means customs and tariff duties are
based on quantity or volume) of importation means the invoice cost of the goods imported, plus,
all the legitimate. expenses of importation prior to the release of the goods from customs
custody; or when the customs and tariff duties are based on the value of the importation, the tax
base (counterpart of landed cost) is the dutiable value of the importation, as determined by the
Bureau of Customs, plus all legitimate expenses of importation prior to the removal of the goods
from customs custody. Moreover, the following are typical and legitimate expenses of
importation: insurance, freight, interest, stamps, bank charges, customs duties, customs
brokerage fee, wharf age dues, excise tax, if any, and processing fee. Prior to removal from
customs custody, the value- added tax, the excise tax, if any, and the customs duty must all be
paid. The value-added tax paid on an importation is an input tax of the importer which is
creditable against his output taxes.
In addition, there is no importation when a shipment of goods from abroad arrived in the
Philippines. It is in the premises of the Bureau of Customs. But, there is an importation when a
shipment of goods from abroad arrived in the Philippines. It was removed by the importer from
customs custody for transfer to his place of business. Reyes (2019) emphasized that an
importation is completed when the goods brought into the Philippines are removed from customs
custody.
2. What aspects of the lesson do you believe are most useful in your understanding of
the subject matter?
The aspects of the lesson I believe are most useful in my understanding of the subject
matter is the importance and significance of value-added tax on importations. Where in, among
many businessmen view such a tax as an aid to international competitiveness since VATs are
levied on imports but rebated on exports, such that income tax is paid by producers of exports
but not by foreign producers of the goods we import, however, the VAT is paid on imports but
not on exports. For that reason, our country has an advantage in international competition over
countries that rely on income taxation.
Moreover, in practice a VAT, for acknowledgement, will indeed affect trade flows is not
the same as saying that the lay view is right. A VAT, in fact, enhances the international
competitiveness, in some sense, of the country that adopts it may well be the reverse of the truth
in a widespread view. Also, a VAT in practice probably tends to reduce rather than increase the
size of a country’s traded goods sector to the extent that a VAT taxes traded goods more heavily
than nontraded, which is normally the case. Hence, on a country’s trade balance in the short run
of substituting a consumption tax for taxes, like the income tax, that distort intertemporal
consumption choices that against this may be set the favorable effect on saving.
Because VAT levied on imports and rebated on exports, acts as a combination of
protection and export subsidy, giving the traded goods sectors of countries with VATS an
advantage over the corresponding sectors of countries that rely on income taxation there is a
widespread belief that giving the traded goods sectors of countries with VATS an advantage over
the corresponding sectors of countries that rely on income taxation. Hence, a VAT is not a
protectionist measure but, the supposedly procompetitive device of export rebates is important if
the VAT is not to act as an export tax, wherein it is actually a nationalist measure that would
lessen both the imports and exports. Additionally, the ensuing accumulation of foreign
investment would prime to a surge of imports in excess of exports in the lengthier term. A VAT,
in practice, VAT would almost confidently fall more profoundly on traded rather than nontraded
goods, which would establish a bias against both exports and imports.
Additionally, the VAT based on the total value used by the Bureau of Customs in
defining tariff and customs duties, plus excise taxes, if any, and other charges which shall be
paid prior to the issue of the goods from customs custody wherein the importation of goods is
subject to a 12% VAT, provided, if any, that where the customs duties are known the VAT shall
be based on the landed cost plus excise tax on the basis of the quantity or volume of the goods.
The consumers thereof shall be measured the importers thereof who shall be accountable and
responsible for any internal revenue tax on such importation in case tax-free imports are
successively sold to non-exempt persons.

M7PLR Value Added Tax On Importations Peralta, Claricel Joy A. Bsa 2D

Uploaded by

Copyright:

Available Formats

M7PLR Value Added Tax On Importations Peralta, Claricel Joy A. Bsa 2D

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

M7PLR Value Added Tax On Importations Peralta, Claricel Joy A. Bsa 2D

Uploaded by

Copyright:

Available Formats

M7PLR

Value Added Tax on Importations

PERALTA, CLARICEL JOY A.

1. What concept did you learn today?

You might also like