Advocates Push for Complete Removal of VAT
A coalition of Filipino entrepreneurs has urgently called for the complete removal of the value-added tax (VAT), highlighting it as a major driver of rising production costs. This call for action comes as lawmakers debate reducing the current VAT rate from 12 percent to 10 percent.
Negosyo Advocates, a network representing local business owners, insists that merely lowering VAT is insufficient. Instead, they argue that scrapping the VAT altogether would better relieve the economic burden on producers and consumers alike.
VAT’s Impact on Production and Prices
In a detailed statement, the group emphasized that VAT significantly inflates production expenses, which inevitably leads to higher prices for essential goods and services. One critical example they cited is the VAT levied on fuel. Eliminating this tax, they claim, would immediately reduce production costs and help stabilize commodity prices across the board.
Community members noted, “If we can remove VAT on fuel, production expenses will drop instantly, easing the prices that Filipinos face daily.” This sentiment reflects widespread frustration over persistent price hikes that strain household budgets.
Government Revenue vs. Project Spending
Officials reported that the Bureau of Internal Revenue (BIR) collected a staggering P643.85 billion in VAT revenue in 2024 alone. Despite this, concerns have been raised about government spending, particularly on flood control projects that were either ghost or substandard, with costs exceeding a trillion pesos.
Local leaders pointed out that if the government can allocate such vast sums for flawed projects, it should be financially feasible to abolish VAT without destabilizing the economy.
Economic and Social Implications
The advocacy group stressed that scrapping VAT will not harm economic stability. On the contrary, it would ease the financial burden on Filipino families who continuously struggle with price increases. They underscored the need for fiscal responsibility and transparency in public spending to support this move.
“Scrapping the tax will not harm the economy, but it will ease the burden of Filipinos who suffer from constant price increases,” community members affirmed, underscoring the urgent need for reform.
Looking Ahead
As the debate over VAT continues, the calls for its complete removal highlight the growing demand for solutions that directly address the cost of living crisis. The discussion also raises broader questions about government accountability and the prioritization of public welfare.
For more news and updates on tax policies and economic reforms, visit Filipinokami.com.
