Senator Bam Aquino on Thursday urged the government to suspend or reduce the value-added tax (VAT) on petroleum products to provide immediate relief to Filipinos grappling with rising fuel costs amid the ongoing Middle East crisis.
Speaking at the Senate’s Proactive Response and Oversight for Timely and Effective Crisis Strategy (PROTECT Committee) hearing, Aquino said lawmakers are studying a measure that would grant the President authority to adjust VAT on fuel.
“We are looking at a follow-up measure na hindi lang tungkol sa excise tax, but powers for the president to suspend or lower VAT for petroleum products. Napag-usapan po ito kasi mas malaki ang pwedeng maging bawas nito kaysa sa excise tax,” he explained.
Representatives from oil companies supported Aquino’s proposal, noting that removing the 12% VAT would allow them to pass on price reductions more quickly.
“It’s easier for us to implement reduced prices when VAT is removed. If you don’t have the VAT, it’s not part of your cost anymore,” said Tanya Samillano, representing small oil players.
Aquino also urged the Department of Finance (DOF) to calculate the potential benefits to consumers from removing VAT, stressing that such a move could complement other relief measures.
He cited the swift passage of the excise tax suspension bill as proof that the Senate is ready to act quickly if economic managers recommend reforms.
The senator co-authored and co-sponsored Republic Act No. 12316, which grants the President emergency powers to suspend or reduce excise taxes on petroleum products.
If implemented, the law could reduce gasoline prices by ₱10 per liter, diesel by ₱6 per liter, liquefied petroleum gas by ₱3 per kilo, and kerosene by ₱5 per liter.