Senator Escudero: use VAT windfall from fuel as public aid

Senator Francis Escudero is urging the government to use the unexpected increase in value-added tax (VAT) collections from fuel as direct financial aid to sectors severely affected by rising fuel prices.

Escudero said the higher VAT revenues should not be viewed as additional government income, but rather should be set aside to help Filipinos cope with the impact of higher fuel costs.

“‘Windfall’ lang ang tawag diyan dahil hindi naman planado o pinaghirapan ng gobyerno ang dagdag na koleksyon. Tumaas lang ang presyo ng langis kaya mas mataas din ang VAT na pumapasok. Mas tama na ibalik ito sa mga pinakaapektadong sektor bilang tulong,” he said.

He argued that using the funds this way would help avoid the perception that the government is benefiting from a crisis, comparing it to profit-taking during a difficult situation.

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

“Kung hindi naman tatanggalin ang VAT, ibalik na lang sa taumbayan ang dagdag o windfall na kita mula rito bilang ayuda,” he said.

Escudero’s proposal comes after President Ferdinand Marcos Jr. said the administration would retain VAT on petroleum products, citing the additional revenue as a source for crisis response. The President also said suspending VAT would mainly benefit oil companies rather than consumers.

Finance Undersecretary Karlo Fermin Adriano earlier estimated that higher fuel prices could generate an additional P13 billion to P14 billion in VAT collections, even with the suspension of excise taxes on liquefied petroleum gas and kerosene, which are commonly used by households and small businesses.