Malacanang: President has no power to suspend VAT on fuels

VAT on fuels can only be suspended by Congress, says Malacañang

The Philippines imposes some of the highest taxes in the region, and while pump prices have already more than doubled due to the US-led Middle East conflict, they are still subject to Value Added Tax (VAT) on top of excise taxes of PHP 10/L on gasoline and PHP 6/L on diesel.

With the country heavily dependent on diesel and gasoline for transport and logistics, concerns are growing that the rising cost of fuel will soon spill over into the prices of basic goods, once again placing the greatest burden on the working class.

This has prompted questions on why the government is still not considering the suspension of excise taxes, and even VAT on fuels as a way to provide broader, more immediate relief to gasoline and diesel users, instead of relying solely on targeted aid programs, a.k.a. ayuda, that critics say are vulnerable to inefficiencies and corruption.

As for Malacañang, while the President now has the power to reduce or suspend the excise tax on fuels, reducing or suspending VAT on fuels is another story.

“Sa ngayon, wala kasing batas na nagbibigay ng anumang emergency powers para sa Pangulo na siya ay mag-suspend ng VAT sa fuel products. Ito po ay nakasalalay po sa Kongreso,” said Palace Press Officer, Usec. Atty. Claire Castro.

(At present, there is no law granting the President emergency powers to suspend VAT on fuel products. This rests with Congress.)

Castro added that the President must carefully balance multiple considerations, including the need for tax revenues to sustain government programs and support other national priorities.

Earlier, the President suspended the excise tax on LPG and kerosene, providing temporary relief to households and industries that rely on these fuels, or equivalent to PHP 3/kg on LPG and PHP 5/L on kerosene.