Photo courtesy of Philippine News Agency (PNA).
Senator Erwin Tulfo has filed a measure seeking to lower the value-added tax from 12 percent to 10 percent, citing the need to ease inflation and reduce the cost of living for Filipino households.
Under Senate Bill No. 1552, or the proposed VAT Reduction Act of 2025, Tulfo said the tax cut is intended to strengthen consumers’ purchasing power.
The senator said a lower VAT would allow families to keep more of their income, encouraging spending rather than relying on government assistance that may be inefficiently distributed.
Tulfo argued that increased consumer spending could help stimulate economic growth and eventually offset revenue losses through improved tax collection.
He noted that the Philippines is among the countries with the highest VAT rates in Southeast Asia, sharing the 12-percent rate with Indonesia, while most neighbors impose lower taxes.
“The VAT Reduction Bill will not only lighten the load for ordinary Filipinos but will also make our country more competitive among our Southeast Asian neighbors,” Tulfo said.
The bill allows the President to temporarily reinstate the 12-percent VAT upon the finance secretary’s recommendation if the national deficit is projected to breach fiscal limits.
