Metro Manila, Philippines – A bill lowering value-added tax (VAT) on goods and services from 12% to 10% has been filed in the Senate, formalizing calls for a tax cut amid rising prices triggered by the Middle East crisis.
Senator Bam Aquino filed his proposed VAT Reduction Act on Thursday, April 16. It seeks to amend the National Internal Revenue Code of 1997 to reduce VAT on goods or properties, imports, and services, including petroleum products.
Aquino said the measure would provide much-needed relief for the middle class, which is largely excluded from government aid programs.
“Habang tumatagal ang krisis na ito, hindi lang mahirap ang tinatamaan kundi ang ating middle class, kung saan kabilang ang ating mga kababayang naghahanapbuhay ngunit hindi nakakakuha ng direktang tulong mula sa ating pamahalaan,” Aquino said.
[Translation: As the crisis drags on, it is not only the poor who are affected but also our middle class, which includes our fellow Filipinos who are working but do not receive direct assistance from our government.]
“Batay sa pahayag ng Department of Energy, posibleng umabot ng anim na buwan hanggang isang taon ang epekto ng krisis sa Middle East sa presyo ng ating produktong petrolyo at mga bilihin,” he added.
[Translation: Based on the statement of the Department of Energy, the impact of the Middle East crisis on the prices of petroleum products and basic goods could last from six months to a year.]
Congress earlier granted the President authority to suspend excise taxes on petroleum products amid the Middle East crisis. However, President Ferdinand Marcos Jr. imposed the tax cut only on liquefied petroleum gas and kerosene, excluding diesel and gasoline.
Senator Erwin Tulfo, who has also been calling for the removal of VAT on petroleum products, earlier acknowledged it may not yet be the right time for such a proposal, citing concerns over foregone government revenues. He, however, expressed hope that the administration would at least extend excise tax relief to cover diesel and gasoline.
