Senator Erwin Tulfo on Sunday announced he is pushing to lower the country’s value-added tax from 12% to 10% to give consumers immediate relief from rising prices, despite earlier warnings that the move could cut government revenue.
Tulfo said the reduction would boost household purchasing power and help stimulate the country’s gross domestic product.
“We are among the countries with the highest VAT in Southeast Asia, and this is a heavy burden for low- and middle-income families,” the neophyte senator said.
At 12%, the Philippines and Indonesia top the region’s VAT rates, followed by Cambodia, Vietnam, and Laos at 10 percent, prompting Tulfo to file Senate Bill No. 1552, or the VAT Reduction Bill.
The measure includes a safeguard allowing the president, with finance secretary approval, to temporarily restore the 12% rate if the national deficit exceeds targets set by the Development Budget Coordination Committee.
