Senator Bam Aquino is pushing for a reduction in the value-added tax (VAT) from 12% to 10%, saying the measure could provide medium- and long-term solutions to protect the middle class from the effects of the ongoing Middle East crisis and future economic shocks.
Aquino filed Senate Bill No. 2047, which seeks to amend Sections 106, 107, and 108 of the National Internal Revenue Code of 1997 to lower VAT on goods and services, including petroleum products.
He stressed that the proposal would help ease the burden on consumers, particularly the middle class who do not receive direct government assistance, amid rising fuel and commodity prices.
“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,” Aquino said.
“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 added.
Aquino explained that lowering VAT would directly reduce prices across the economy—from basic goods and transportation to utilities and other essential expenses—providing relief to households.
He emphasized that the measure would also stabilize consumer spending in the medium term, giving families more disposable income to support businesses, 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.
In the long run, Aquino underscored the need to pair VAT reduction with stronger tax administration to minimize leakages, improve compliance, and ensure fairness, balancing revenue collection with public welfare.