REPRESENTATIVE Leandro Leviste has put forth a compelling argument that reducing the Value Added Tax (VAT) is a viable solution to alleviate the impact of rising oil prices on Filipino consumers.
Leviste highlighted his proposed legislation, House Bill No. 4302, which seeks to lower the VAT rate from the current 12% to 10%. He expressed frustration that despite the potential benefits, some parties continue to oppose this measure, asserting that a VAT reduction is indeed feasible.
Leviste pointed out that the Philippines has the highest VAT rate among Southeast Asian nations. He questioned the opposition by drawing a comparison with other countries in the region that provide excellent public services with lower VAT rates, suggesting that the Philippines should be capable of doing the same.
According to his estimates, a reduction in VAT from 12% to 10% would result in a tax cut of approximately P250 billion annually. This translates to a potential annual savings of P9,000, or P750 per month, for every Filipino family.
Furthermore, Leviste proposed an alternative to the current VAT system: a Wealth Tax. This tax would specifically target billionaires, ensuring that the financial burden is shifted towards the wealthiest segment of the population.
He grounded his argument in the principle of progressive taxation enshrined in the Philippine Constitution, which mandates that the tax system should require higher contributions from the wealthy than from the poor.
Leviste lamented that this constitutional principle is not being adequately followed, suggesting that the continued high VAT rate and the opposition to its reduction stem from a preference among some officials to protect the interests of politicians and the affluent over those of ordinary Filipinos.
With the current surge in oil prices, Leviste urged the government to heed the public’s sentiment and abandon policies that place undue hardship on Filipinos.
He stressed the importance of implementing measures that genuinely support the populace, especially during times of economic strain. The call for a VAT reduction and the proposal for a Wealth Tax are presented as concrete steps towards a more equitable and responsive fiscal policy that prioritizes the welfare of the majority of Filipino citizens.
