Calls to suspend the value-added tax (VAT) on petroleum products intensified this week, with senators pushing for broader fuel tax relief as global oil prices continue to rise.

During the April 13 hearing of the Senate Proactive Response and Oversight for Timely and Effective Crisis Strategy (PROTECT) ad hoc committee, Senator Erwin Tulfo said reducing excise taxes alone would have limited impact on consumers.

“Pero actually, hindi po talaga mararamdaman ng mga tao po ito, itong 10% reduction na excise tax,” he said (But actually, people will not really feel this 10% reduction in excise tax).

“Mararamdaman po ito kung yung VAT din and aalisin din po natin. But yung mga nag-commute po, hindi nila mararamdaman po ito,” he added (This will be felt if the VAT is also removed… But commuters will not feel it).

Tulfo said his proposed measure would automatically suspend both VAT and excise taxes once global oil prices reach USD 80 per barrel, based on Mean of Platts Singapore benchmarks.

In a statement released April 14, Senator Loren Legarda called for the removal of VAT on fuel, framing the situation as a cost-driven crisis rather than a revenue issue.

“Hindi naman ito revenue crisis kundi cost-of-living crisis,” she said (This is not a revenue crisis but a cost-of-living crisis).

She stressed that taxing petroleum during a price surge effectively burdens essential economic activity.

Legarda added that suspending VAT would deliver immediate and broad-based relief across sectors.

“Kapag tumataas ang presyo ng krudo, damay ang buong ekonomiya… kapag bumaba ang gastos… lahat ay makikinabang,” she said (When oil prices rise, the entire economy is affected… when costs go down… everyone benefits).

Also on April 14, Senate President Pro Tempore Panfilo Lacson urged the government to weigh targeted support mechanisms alongside tax policy adjustments, instead of relying heavily on traditional subsidy programs.

Lacson cited Department of Finance estimates showing that suspending excise taxes could cost PHp 200.899 billion in 2027, while removing VAT could result in an additional PHP 119.326 billion in foregone revenues, or about PHP 320 billion combined.

He said the government may instead consider channeling potential revenues toward targeted subsidies.

“Ang revenue na di mawala… baka pwedeng pagaralan para ilagak kung saan ang direktamenteng apektado… At di lang may kotse ang makikinabang,” he said (The revenue that will not be lost… could be studied and allocated to those directly affected… and not only car owners will benefit).

The calls come as the government moves forward with the suspension of excise taxes on LPG and kerosene, while deliberations continue on similar measures for diesel and gasoline under emergency powers granted to President Ferdinand Marcos Jr..

What’s your view? Should policymakers prioritize VAT suspension for immediate price relief, or maintain revenues to fund targeted subsidies for the most affected sectors?