President Ferdinand Marcos Jr. announced on Monday that the Philippine government will retain the Value-Added Tax (VAT) on petroleum products.

He emphasized that these tax revenues are essential for funding social programs and public assistance.

During a Palace press briefing, Marcos explained that higher global oil prices have increased VAT collections, providing the government with additional funds to support sectors beyond petroleum.

He noted that removing the tax would primarily benefit the oil industry while reducing the resources available for subsidies and aid programs.

“Here’s the thing with the VAT, especially the VAT on oil, on petroleum products. The VAT on petroleum products, we are going to get a windfall profit from that because tumaas ‘yung presyo ng krudo,” said Marcos.

“Because of that, all the importations will have, at the present VAT rate, we will get extra funds from that. If we take away the VAT on petroleum products, it will only help the petroleum market,” he added.

The President has emphasized that government assistance is intended for a broader segment of society, rather than being limited only to those directly affected by fuel price hikes.

“Hindi puwedeng titingnan lang natin is the petroleum, petroleum, petroleum. Kasi sinasabi ng mga tao, bakit puro transport workers lang ang tinutulungan niyo? Paano kami?…We also have to take care of the other sectors,” the Chief Executive said.

He noted that additional revenues from VAT will be used to address various national needs, highlighting that such funding would be unavailable if the tax on petroleum products were removed.

However, Marcos stated that the government remains open to reviewing policy options.

“There is nothing that we are not looking at as a possible option. We are looking at all the options,” he said.

He assured that any proposal to reduce VAT on specific goods will undergo a careful evaluation.

“Right now, the balance, the cost-benefit analysis between the VAT collections and the benefit to people, to ordinary people, still favors that we collect VAT and we use the extra funds to provide the subsidies, to provide cash benefits, to provide all of those subsidies that we have been able now to provide, that we have to provide now to people to normalize people’s lives,” Marcos said.

-Paraluman News