Bawas VAT Aims To Lower VAT For Poor People

In the last couple of weeks that we are hearing about the increase of prices and necessities, that and including the past couple of years, the poor people in the country are the ones shouldering it the most.

This is what Senator Risa Hontiveros aims to change in her proposed “Bawas VAT” bill. The bill sought to lower the Value Added Tax (VAT) from 12 percent down to 10 percent. It will still be higher than a couple of percent than the average in Southeast Asia which is at 8 percent.


“The past dozen or so years, mas binabalikat ng mahihirap ang mas mataas na valued added tax (the poor have shouldered much of the VAT). So it will be reasonable, I believe, to reduce it finally to the 10 percent original proposed level by the first day of next year,”

She also said that there would still be exemptions in the lowered VAT rate. The senior citizens, persons with disability, cooperatives, and socialized housing for the poor should still be exempted.

The economic zones and their exemptions should also be reviewed according to the senator.

Under the bill that she is proposing, the VAT rate can still be lowered further to 8 percent. At par with the other countries in Southeast Asia.

Tax reforms

In response to the fear that lowering the VAT might hurt the country’s future. Hontiveros explained that the lowering of the VAT rate will not hurt the country’s P8-trillion infrastructure program because the finance department is expecting tax reforms that will, in turn, generate P130 billion in revenues.

Her proposed bill will only lighten the burden that the poor Filipinos are having to carry because of the 12 percent VAT. But she made sure that it won’t hurt the country and we will still be competitive in comparison to other countries in Southeast Asia.

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