Energy Secretary Sharon Garin has cautioned that the government stands to lose around ₱170 billion in annual revenue should the Value-Added Tax (VAT) on petroleum products be abolished.
Speaking at a press briefing on Friday, Garin said the estimate was based on figures from the Department of Finance, underscoring the fiscal impact of proposals to remove the tax.
“I’m not from the Department of Finance, but I think the estimate was about ₱170 billion per year ang VAT on petroleum products. So, that’s ₱170 billion also na mawawala sa collection,” she said.
Garin explained that eliminating VAT on fuel would require legislative action, as the tax is mandated under the National Internal Revenue Code and can only be amended or repealed by Congress.
“Is it possible to eliminate the VAT? The VAT is imposed under the Revenue Code, which was under Congress. It’s a legislation. This was imposition by legislation, and it’s an imposition that can only be removed through legislation also,” she noted.
While she did not outline specific policy alternatives, the energy chief stressed that VAT on petroleum remains a major source of government revenue.
Any move to suspend or abolish it, she said, would carry significant fiscal consequences for the state.