SENATOR Bam Aquino has filed a proposed measure seeking the reduction of the value-added tax (VAT) from 12 to 10 percent in a bid to cushion the prolonged effects of the ongoing conflict in the Middle East, especially for middle-class families and workers.
Under Senate Bill 2047, Aquino is proposing amendments to key provisions of the National Internal Revenue Code of 1997 to lower VAT on goods and services across the economy, including petroleum products, providing both immediate relief and longer-term economic stability amid rising fuel costs and inflation.
By lowering VAT, Aquino said the measure would help ease the burden on consumers, especially the middle class, which does not receive government aid amid high prices of petroleum products and other goods brought about by the ongoing oil crisis.
As global oil prices remain volatile, he emphasized that the burden is no longer limited to low-income households, noting that the Department of Energy has warned that the effects of the Middle East crisis on petroleum prices could last from six months to as long as a year.
“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,” he said.
(As this crisis continues, it is not only the poor who are affected but also our middle class, including our fellow citizens who are working but are not receiving direct assistance from our government.)
Beyond immediate relief, Aquino argued that the measure could help sustain consumer spending in the medium term.
He said that with more disposable income, households would be able to support businesses, helping protect jobs and stimulate economic activity.
“By reducing VAT, we take a concrete step toward making the cost of living more manageable and supporting a more inclusive and resilient economy,” he said.
Recognizing that lowering the VAT could have implications on government revenues, stronger tax administration measures, including improved compliance and reduced leakages, should be implemented to ensure that public services remain funded.
Aquino co-authored and co-sponsored Republic Act 12316, which grants the President emergency powers to suspend or reduce excise taxes on petroleum products. (TPM/SunStar Philippines)