Batangas First District Representative Leandro Legarda Leviste has introduced House Bill No. 4302, also dubbed the VAT Reduction Act of 2025, proposing to lower the current 12% value-added tax (VAT) on goods and services to 10%.
This move is projected to help ease inflation and save the average Filipino household around ₱7,000 per year.
Leviste argues that VAT is a regressive tax that places a heavier burden on low- and middle-income families, and that reducing it could be a more direct and efficient form of poverty alleviation.
He also highlighted that the Philippines currently maintains the highest VAT rate in Southeast Asia, compared to 10% in Vietnam and Cambodia, 11% in Indonesia, and as low as 7% in Thailand.
To offset potential revenue losses—estimated at over ₱200 billion annually—Leviste has proposed increasing taxes on the wealthy, including landowners with high-value properties.
Representatives from the Department of Finance have indicated a willingness to “take a look at all of these proposals” during discussions in the House Committee on Ways and Means.
As Congress considers the legislation, analysts and stakeholders will be watching how the government balances tax relief for the majority with fiscal sustainability—and what that balance might mean for broader economic planning and social support strategies going forward.
