Gov. Marcos calls for suspension of VAT, not fuel excise tax

Ilocos Norte Gov. Maria ‘Imee’ Marcos (Photo Credits:

Ilocos Norte Gov. Imelda ‘Imee’ Marcos calls for the government to suspend the value added tax (VAT), rather than the second tranche of fuel excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, also known as Republic Act No. 10963.

Marcos, who is running for Senator in the 2019 midterm elections, explained that the public will only start to feel the impact of the suspension of the fuel excise taxes either on February or March 2019. However, if the government will halt imposing the 12% VAT, the public will immediately feel its effects.

The governor stressed that VAT covers all services, and products. She also added that even reducing VAT by 2% or 5% will already make a large difference.

Marcos further clarified that she does not recommend suspending the VAT on all products and services but only on foods and petroleum products, which was hit by inflation the most.

Yung VAT talaga kada-transaction, kada-bili, kahit anong bibilhin mo, kahit anong serbisyo ang babayaran mo laging mag 12%,” Marcos said during an exclusive interview with DZRH.

Yung pag-tanggal ng 12% diyan o at least kung ano ang ma-cocompromise natin diyan ay malaking bagay sa atin. Immediate yung effect kasi ngayon din ay mararamdaman natin dahil sa bawat sandali, sa bawat bili natin, ay may 12% VAT,” Marcos added.

Malacanang has already confirmed that President Rodrigo Duterte plans to sign an order to temporarily suspend the fuel excise taxes set to be imposed on 2019 in order to ease inflation in the Philippines, which went up to 6.7% on September.

Under the TRAIN law, a Php 2.50 excise tax was imposed per liter of diesel, while a Php 7.00 excise tax was imposed per liter of gasoline. The law also enforces a Php 2 annual increase in the excise taxes for diesel and gasoline from 2019 to 2020.

R.A. 10963 also has a provision that allows the suspending further increases on the excise taxes for petroleum products if the global price of crude oil averages $80 per barrel for a duration of three months.

If the government goes through with suspending the next tranche of fuel excise taxes, the Department of Finance expects to lose Php 41 billion of revenues.

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