It’s high time the government provided the poor and the middle class with much-needed tax relief and instead should exert efforts to recover revenue losses by collecting more from the rich, according to Batangas Rep. Leandro Leviste.
In filing House Bill No. 4302, also known as the “VAT Reduction Act of 2025,” the billionaire lawmaker stated that he was seeking to lower the “regressive” Value-Added Tax from 12 to 10 percent to provide tax relief to millions of Filipino households and help alleviate inflation.
The measure, if passed, could reduce annual VAT collections by over P200 billion—equivalent to an estimated P7,000 savings per household each year, Leviste said.
“This bill is about giving ordinary Filipinos a break. The VAT is regressive, hitting the poor and middle class the hardest. Lowering it makes our tax system more progressive,” he said.
The 32-year-old Leviste said the foregone revenue can be recovered by imposing other progressive taxes like a land-based wealth tax on the rich – a proposal, which he is yet to relay to the House committee on ways and means, chaired by Marikina City Rep. Miro Quimbo.
Leviste raised the matter during the panel’s organizational meeting yesterday, reminding Quimbo that he, himself, had vowed that if there are any tax measures, they will ” churn out, it has to be progressive.”
“Progressive, meaning we tax those with the capacity to pay and we try to feduce the indirect taxes that really hit the poor,” he told the panel, which reviews and decides on tax bills.
Finance Undersecretary Karlo Adriano agreed with Leviste that “in general, VAT is regressive.” “But with certain exemptions, that’s why we have exemptions of food, agriculture. We actually have so many exemptions to ensure that it will not be too regressive and hopefully, (it will be) progressive,” he said.
Leviste said he wanted to confirm from the finance department that VAT is a regressive tax “because the poor pay a larger percentage of their income than the rich.”
Adriano said the Department of Finance will have to study Leviste’s proposal and agreed that taxes should be progressive. He said that by definition, “wealth tax should be progressive.”
When Leviste asked if the House of Representatives, in the current 20th Congress, could prioritize the passage of a bill lowering VAT and review his proposal for wealth taxes, Adriano said, “We’re willing to take a look at this proposal.”
Quimbo could not commit yet if Leviste’s bill will be prioritized by the panel “because we’re a collegial body.” He , however, vowed to “take a good, hard, and long look at any initiative that makes our taxes more progressive.”
In an interview, Leviste said a land-based wealth tax of P300,000 per square meter would help offset the revenue losses from the VAT rate reduction. He said it would be better to leave more funds to Filipino households since taxes they pay only go to graft and corruption, citing the ghost and substandard flood control projects of the Department of Public Works and Highways (DPWH).
“Some rich people, they’re just accumulating wealth but they’re spending it abroad. But if the money is in the pockets of consumers, then the money only goes around in the economy, and that will lead to progress,” he said.
Leviste, citing data from the Bureau of Internal Revenue and Bureau of Customs, noted that when the Expanded-VAT (E-VAT) Law raised the rate from 10 to 12 percent in 2005, VAT collections grew nearly eight-fold, from P156.67 billion in 2004 to P1.20 trillion in 2025.
The Philippines currently imposes the highest VAT rate in Southeast Asia at 12 percent. In comparison, Vietnam and Cambodia levy 10 percent, Indonesia 11 percent, Singapore 9 percent (GST), and Thailand 7 percent. Malaysia, Laos, and Myanmar impose rates between 5 to 7 percent.
