Senate Office of the Sreetary TWENTIETH CONGRESS OF THE) REPUBLIC OF THE PHILIPPINES ) ) APR -6c P12 :29 First Regular Session SENATE RECEIVED BY: S.B. No. 2022 Introduced by SENATOR IMEE R. MARCOS AN ACT GRANTING TEMPORARY VALUE-ADDED TAX (VAT) EXEMPTION ON BASIC COMMODITIES AND REDUCING EXCISE TAX ON PETROLEUM PRODUCTS BY FIFTY PERCENT (50%) FOR A PERIOD OF THREE (3) MONTHS DURING A DECLARED NATIONAL EMERGENCY OR STATE OF CALAMITY, AND FOR OTHER PURPOSES EXPLANATORY NOTE The Philippines remains highly vulnerable to global oil price volatility due to its heavy dependence on imported petroleum. Recent geopolitical tensions in the Middle East have disrupted global supply chains, resulting in sustained increases in crude oil prices that directly translate into higher domestic fuel costs, transportation fares, food prices, and overall inflationary pressures. These developments disproportionately affect Filipino consumers, particularly low-income households and sectors dependent on transport and logistics. While our existing laws allow limited fiscal intervention through adjustments in excise tax, there is an need for a stronger, immediate, and time-bound mechanism during periods of national emergency or state of calamity. In this light, this measure seeks to provide temporary relief by exempting basic commodities from the twelve percent (12%) Value-Added Tax (VAT) and reducing excise taxes on petroleum products by fifty percent (50%) for a period of three (3) months upon the declaration of a National Emergency or State of Calamity by the President. The bill further provides that such tax relief measures shall be activated only upon the President's declaration of a National Emergency or State of Calamity,
consistent with existing legal frameworks. This ensures that the grant of tax relief is anchored on clearly defined and officially recognized emergency conditions. To safeguard public interest, the measure mandates strict monitoring and enforcement by concerned government agencies to ensure that the benefits of tax relief are fully passed on to consumers and not absorbed by intermediaries. It likewise provides for a limited duration of three (3) months, subject to automatic expiration, in order to balance the need for immediate relief with fiscal responsibility. In view of the foregoing, the passage of this measure is earnestly sought. Ime h. marca AMEE R. MARCOS
Sitate Officp of the Secretary APR -6 P12 :29 TWENTIETH CONGRESS OF THE) REPUBLIC OF THE PHILIPPINES ) RECEIVED BY: ) First Regular Session SENA 622 S.B. No. - Introduced by SENATOR IMEE R. MARCOS AN ACT GRANTING TEMPORARY VALUE-ADDED TAX (VAT) EXEMPTION ON BASIC COMMODITIES AND REDUCING EXCISE TAX ON PETROLEUM PRODUCTS BY FIFTY PERCENT (50%) FOR A PERIOD OF THREE (3) MONTHS DURING A DECLARED NATIONAL EMERGENCY OR STATE OF CALAMITY, AND FOR OTHER PURPOSES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
Section 1. Short Title. - This Act shall be known as the "National Emergency
Tax Relief and Consumer Protection Act".
Sec. 2. Declaration of Policy. - It is the policy of the State to protect
consumers, particularly low- and middle-income households, from undue price increases and ensure the availability and affordability of basic commodities during periods of a declared national emergency or state of calamity.
Sec. 3. Temporary Value-Added Tax (VAT) Exemption on Basic Commodities.
- Notwithstanding Section 109 of the National Internal Revenue Code of 1997 (NIRC), as amended, the sale, importation, and distribution of basic commodities shall be exempt from the twelve percent (12%) Value-Added Tax (VAT) for a period of three (3) months from the declaration of a National Emergency or a State of Calamity by the President. For purposes of this Act, basic commodities shall include, but not be limited to: a. Rice, corn, and other staple grains; b. Fresh, dried, and canned fish and marine products; C. Fresh meat, poultry, and eggs; d. Fresh vegetables and fruits; e. Cooking oil, sugar, and salt;
f. Liquefied petroleum gas (LPG); g. Kerosene, gasoline, diesel, and other petroleum products. h. Such other basic commodities as may be determined by the Department of Trade and Industry (DTI), and the Department of Agriculture (DA), based on necessity, price sensitivity, and impact on low-income households, in consultation with the Department of Finance (DOF). The DOF, in coordination with the DTI and DA, shall issue the necessary guidelines to ensure effective implementation of this Act, including safeguards against abuse, hoarding, profiteering, and other anti-competitive practices.
Sec. 4. Temporary Reduction of Excise Tax on Petroleum Products. -
Notwithstanding Section 148 of the National Internal Revenue Code of 1997 (NIRC), as amended, the excise tax imposed on petroleum products shall be reduced by fifty percent (50%) for a period of three (3) months from the declaration of a National Emergency or a State of Calamity by the President. Covered petroleum products shall include, but are not limited to: a. Gasoline; b. Diesel; c. Kerosene; d. Liquefied petroleum gas (LPG); e. Aviation fuel and other refined petroleum products.
Sec. 5. Duration and Automatic Expiry. - The tax relief measures provided
under this Act shall remain in force for three (3) months from the declaration of a National Emergency or a State of Calamity by the President, unless earlier lifted or extended by Congress upon recommendation of the DOF and the Department of Economy, Planning, and Development (DEPDev), based on clear indicators including global oil prices, inflation rate, supply conditions, and overall economic impact on consumers. Upon expiration of the period herein provided, all tax rates shall automatically revert to their levels prior to the declaration of a National Emergency or a State of Calamity by the President, unless otherwise provided by law.
Sec. 6. Activation of Tax Relief Measures. - The tax relief measures
provided under Sections 3 and 4 of this Act shall not be self-executing and shall be activated only upon the declaration of a National Emergency or a State of Calamity by the President, pursuant to existing laws. Within five (5) days from such declaration, the President shall transmit to Congress a written certification stating the existence of conditions warranting the activation of this Act, including the nature of the emergency, affected sectors, and prevailing economic conditions.
The tax relief measures shall take effect upon such activation and shall remain in force for three (3) months, subject to the automatic expiry clause under
Section 5 of this Act.
Sec. 7. Anti-Abuse and Monitoring Mechanism. - The DOF, DTI, DA,
Philippine Competition Commission (PCC), Department of Energy (DOE), and other relevant government agencies shall ensure strict monitoring and enforcement of this Act to guarantee that the reduction in taxes is fully and directly reflected in the retail prices of basic necessities and petroleum products. Any form of price manipulation, hoarding, profiteering, cartelization, or other pernicious practices affecting the supply, distribution, and movement of basic commodities and petroleum products shall be prosecuted and penalized under Republic Act No. 7581, or the "Price Act", Republic Act No. 10667, or the "Philippine Competition Act" , and other applicable laws.
Sec. 8. Implementing Rules and Regulations. - Within fifteen (15) days from
the effectivity of this Act, the DOF, in coordination with the DTI, DEPDev, PCC, DOE and DA, shall promulgate the necessary rules and regulations for its effective implementation; Provided, that such rules shall be immediately operational upon activation of the tax relief measures as provided in Section 6 of this Act.
Sec. 9. Separability Clause. - If any provision or part hereof is declared
unconstitutional, the other provisions not affected thereby shall remain in full force and effect.
Sec. 10. Repealing Clause. - All laws, decrees, orders, rules and regulations
or parts thereof inconsistent with this Act are hereby repealed or modified accordingly.
Sec. 11. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,