Solon proposes zero VAT on petroleum-product purchases

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Apr 3, 2012

With today's gasoline prices now selling at close to P60 per liter, a lawmaker has proposed a move to exempt the sale or importation of petroleum products from value-added-tax collection. 

Rep. Joseph Victor Ejercito (San Juan City) filed House Bill 6014 in the hopes of providing immediate relief to people who are suffering from the rising cost of fuel. He added that it would be a more effective measure to ease the burden of high fuel prices compared to another Pantawid Pasada scheme or dole-out program. 

"The Pantawid Pasada program of the government falls short at overcoming the burden of the Filipino masses. Neither the bus, jeepney, and taxi operators nor drivers agree it is the solution to the skyrocketing cost of gasoline, diesel, kerosene and LPG. It does not benefit the people at all," Ejercito said.

Ejercity noted that when the expanded VAT or Republic Act 9337 was enacted by Congress in 2004, its purpose was to address the then-looming crisis brought about by an unprecedented increase in national debt. At that time, the country's debt-to-gross domestic product ratio was at a record-high of 78.2 percent.

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"Debt payments then were equivalent to 86.1 percent of government revenues, which was unparalleled since 1986. However, in 2012, the country's debt-to-gross domestic product ratio fell to 55.4 percent, a large improvement from the 2004 level," Ejercito shared.

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Ejercito added that though removing the VAT from the sale and importation of petroleum products would reduce the government's revenues, it can still utilize the incomes and revenues derived from the Philippine Amusement and Gaming Corporation (Pagcor), Philippine Charity Sweepstakes Office (PCSO) and the Malampaya gas project.

"These revenues should be included from the annual drafting of the national budget instead of being treated as off-budget items subject to the full control of the Office of the President. The funds from these sources are sufficient to replenish the lost revenues," Ejercito said.

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