Farmers to Marcos Jr: Remove VAT on oil first to ease inflation

On the VAT refund for foreign tourists

In reaction to President Bongbong Marcos Jr’s approval to refund the Value Added Tax (VAT) of visiting foreign tourists, farmers said the government must first decisively remove the VAT on petroleum products to ease the burden of consumers affected by almost weekly oil price hikes. Oil prices have increased twice this year with another hike expected tomorrow. Based on the Department of Energy’s price monitoring, the net increase so far this year is ₱5.90 per liter for gasoline, ₱2.05/L for diesel, and ₱3.20/L for kerosene.

Estimates show that gasoline prices will increase tomorrow by ₱1.30/L, Diesel by ₱1.00/L, and Kerosene by ₱1.35/L. A big-time price increase on LPG is also expected starting in February or as much as ₱9.50 per kilogram or ₱104.50 per LPG cylinder.

OPH for 2023:

Jan 3₱2.90/L₱2.10/L₱3.05/L
Jan 24₱2.80/L₱2.25/L₱2.40/L

Source: News reports, DOE

“Unahin muna dapat ng gobyerno na tugunan ang panawagan ng publiko na alisin na ang VAT sa langis para bumaba ang presyo ng mga produktong petrolyo. Pero ang ginawang prayoridad ng Pangulo ay bigyan ng VAT refund ang mga turistang papasok sa bansa,” according to Danilo Ramos, chairperson of KMP.

The VAT Refund Program for foreign tourists is part of Quick Wins recommendations from the Private Sector Advisory Council that were approved by Marcos Jr. “This shows the President’s unending favor to private companies and the private sector over public interest,” Ramos added.

Remove excise tax and VAT on oil to ease inflation

KMP said scrapping the oil excise taxes under TRAIN will provide immediate relief to Filipinos and help control the rising inflation. Removing the excise tax and VAT on oil will remove P6 per liter from diesel, P5.35 per liter for unleaded gasoline, and P3 per kilogram of LPG.

Oil revenue losses can be offset by also suspending the corporate income tax (CIT) cuts under CREATE. Reducing indirect consumption taxes such as on oil and increasing direct taxes on income makes the tax system more progressive.

The farmers’ group said Filipinos are still reeling from the damaging effects of frequent oil price hikes in 2022. It can be recalled that from January to March last year, oil prices hiked for 11 consecutive weeks. The net year-to-date price increase in 2022 was at ₱14.90/L for gasoline, ₱27.30/L for diesel, and ₱21.30/L for kerosene. ###

Image by Carlo Manalansan/

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