CHIZ: Use ₱14B VAT windfall from fuel for Aid

Senator Francis “Chiz” Escudero is urging the government to utilize the estimated ₱14 billion windfall from value-added tax (VAT) collections on petroleum products to fund direct financial assistance for sectors affected by rising fuel prices amid tensions in the Middle East.

According to Escudero, the increase in VAT revenues should not be considered additional government income, but rather set aside as support for Filipinos struggling with higher fuel costs.

“‘Windfall’ is the term used because this is not planned or earned through government effort. Oil prices simply went up, so VAT collections also increased. It is more appropriate to return this to the most affected sectors as assistance,” he said.

He added that doing so would help avoid the perception that the government is profiting from a crisis.

“It’s like a businessman profiteering from high prices. Government is not a businessman, and it should not engage in profiteering,” he pointed out.

“If VAT will not be removed, then the additional or windfall revenue should be returned to the people as aid,” he said.

The veteran lawmaker’s proposal comes after President Ferdinand Marcos Jr. said the administration would retain VAT on petroleum products, noting that the “windfall” revenue could be used to fund crisis response programs. The President also said suspending VAT would mostly benefit oil companies rather than consumers.

Finance Undersecretary Karlo Fermin Adriano earlier estimated that higher fuel prices could generate an additional ₱13 to ₱14 billion in VAT collections, even with the suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene, which are commonly used by households and small businesses.