Batangas Lawmaker Pushes Lowering VAT to 10%
Batangas 1st District Representative Leandro Legarda Leviste has filed House Bill No. 4302 aiming to reduce the Value-Added Tax (VAT) to 10%. He urged that lowering VAT to 10% should top the agenda of the House Ways and Means Committee in the 20th Congress. This proposal was highlighted during a recent committee hearing involving the Department of Finance (DOF) on key tax measures.
Committee Focus and Legislative Drive
Leviste, who serves as vice chairman of the House Ways and Means Committee responsible for national financial and taxation matters, emphasized the urgency of this tax reform. He stated, “I move that we put lowering the VAT at the top of the agenda of the Ways and Means Committee of the 20th Congress.” He added that reducing VAT to 10% could lower tax collections by around P200 billion, translating to an average relief of P7,000 per household annually.
Community members noted that how to compensate for the lost revenue remains open for discussion. Yet, Leviste insisted that options should be ready by the next committee meeting, with the goal of passing the bill before the year ends.
Support from Committee Leadership
Leviste appealed to House Ways and Means Committee Chairman Miro Quimbo for strong backing. “Mr. Chair, can we get your best effort that the Ways and Means Committee will pass a bill to lower the Value-Added Tax to 10% by the end of this year?” he asked. Officials reported Quimbo’s affirmative response: “You will have our super best effort.”
Quimbo previously emphasized that any tax reform must be progressive. “If there is any tax measure we will churn out, it has to be progressive. Progressive meaning, we tax those who have the capacity to pay, and we try to lessen the indirect taxes that really hit the poor,” he explained.
Economic Impact and Progressive Taxation
Leviste noted that lowering VAT is a more efficient way to increase Filipinos’ disposable income, boosting consumption and the country’s GDP. He believes that most constituents will benefit from replacing VAT with more progressive taxation measures.
Local leaders highlighted that House Bill No. 4302 grants Congress flexibility to offset the revenue shortfall. It allows the President, upon the Finance Secretary’s recommendation, to decide on implementing the VAT reduction based on the nation’s deficit-to-GDP ratio.
Philippines’ VAT in Regional Context
Community members pointed out that the Philippines currently has the highest VAT rate in Southeast Asia at 12%. By comparison, Indonesia’s VAT is about 11%, Vietnam and Cambodia at 10%, Singapore at 9%, Thailand and Laos at 7%, Malaysia at 6%, Myanmar at 5%, and Timor-Leste at 2.5%. This context fuels calls for urgent tax reform to ease the burden on Filipino consumers.
For more news and updates on lowering VAT to 10%, visit Filipinokami.com.
