MANILA – The Department of Energy (DOE) clarified that any plan to remove the value-added tax (VAT) on petroleum products will require action from Congress, as the tax is embedded in existing law.
Energy Secretary Sharon Garin pointed out that the VAT on fuel is mandated under the National Internal Revenue Code (NIRC), making it beyond the power of the executive branch to abolish on its own.
She stressed that only lawmakers can revise or repeal the provision, underscoring that the process must go through proper legislative channels.
Garin also warned of the fiscal consequences of such a move, noting that the government stands to lose an estimated ₱170 billion annually if the VAT on petroleum products is removed.
She explained that the final impact would still depend on global oil price trends and how the policy is implemented, including whether the exemption would be applied at all levels of the supply chain or limited to retail transactions.
Amid persistent volatility in global oil markets due to tensions in the Middle East, Garin assured the public that authorities are keeping a close watch on fuel retailers and distributors to curb any form of abuse.
The DOE has rolled out stricter monitoring and enforcement measures aligned with Executive Order No. 110 issued by President Ferdinand R. Marcos Jr., aimed at ensuring fair pricing, maintaining fuel quality, and preventing supply disruptions.
Efforts to crack down on hoarding and profiteering have been strengthened with the support of the Philippine National Police, contributing to improved stability in fuel supply, Garin said.
To promote transparency, oil companies are also required to regularly submit reports explaining their pricing adjustments and the factors influencing these changes.
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