Reduced VAT for middle class sought in Senate

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April 16, 2026 | 5:23pm

MANILA, Philippines — To mitigate the effects of the Middle East fuel crisis, a measure to trim the value-added tax (VAT) from 12% to 10% has been filed in the Senate. 

Sen. Bam Aquino on Thursday, April 16, said that trimming the VAT could help shield the middle class from the effects of the crisis. 

Aquino said that based on the estimation of the Department of Energy, the effects of the crisis could last up to a year. 

He has filed Senate Resolution 2047, which would amend the National Internal Revenue Code, reducing the VAT across all goods and services. 

“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. 

(While this crisis drags on, it is not just the poor that has been affected, but the middle class as well, which includes our citizens who have a livelihood  but do not receive direct aid from the government.) 

A reduction in the VAT would help lower the cost of goods and services across the country, Aquino said. 

This would also help stabilize consumer spending and give families more spending power. 

“By reducing VAT, we take a concrete step toward making the cost of living more manageable and supporting a more inclusive and resilient economy,” Aquino said.

However, in the long run, Aquino said that the VAT reduction should also be paired with stronger tax administration to reduce leakages and ensure fair contributions. 

The US-Israel war on Iran has sent global fuel prices soaring, with the Philippines suffering a higher inflation as a result.