The government should consider suspending or reducing the value added tax (VAT) on fuel products as this can provide immediate and substantial relief to Filipinos burdened by the ongoing oil crisis, Senator Paolo “Bam” Aquino IV said.

Aquino made the call during the Proactive Response and Oversight for Timely and Effective Crisis Strategy (PROTECT) Committee hearing on Thursday, March 26, saying senators are now looking into passing a measure empowering the President to suspend or lower VAT for petroleum products.

“We are looking at a follow-up measure na hindi lang tungkol sa excise tax, but powers for the president to suspend or lower VAT for petroleum products,” Aquino said.

“Napag-usapan po ito kasi mas malaki ang pwedeng maging bawas nito kaysa sa excise tax (This was discussed because it could result in a greater reduction than the excise tax),” he further said.

Aquino’s position was supported by representatives from various oil companies that agreed the removal of the 12-percent VAT on fuel products will provide greater and faster relief to Filipino consumers since it is easier for them to implement reduced prices once it is removed.

“If you don't have the VAT, it's not part of your cost anymore,” Tanya Samillano, a representative of small oil players, told senators during the hearing.

At the same time, Aquino encouraged the Department of Finance (DOF) to assist in computing the potential benefits for consumers from the VAT removal.

“This could be another way of helping our countrymen deal with the high oil prices,” he said.

Nevertheless, Aquino said the Senate is ready to act swiftly on such reforms if state economic managers recommend it.

He noted that Congress was able to approve the proposed suspension of excise tax on fuel in record time.