Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ________ 
Introduced by Honorable Representatives 
ARLENE D. BROSAS (Gabriela Women’s Party);   
FRANCE L. CASTRO (ACT Teachers Partylist);  
and RAOUL DANNIEL A. MANUEL (Kabataan Partylist) 
AN ACT EXEMPTING BREAD, SUGAR, COOKING OIL AND OTHER BASIC NECESSITIES 
COMMONLY USED BY POOR FILIPINOS FROM THE IMPOSITION OF THE VALUE ADDED 
TAX, AMENDING FOR THE PURPOSE SECTION 109 (1) OF REPUBLIC ACT 8424, 
OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997, AS AMENDED BY REPUBLIC 
ACT NO. 9337 AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The House of Representatives has been given the exclusive mandate of originating tariff 
bills. Both the 1973 (Article VIII, Section 17) and the 1987 (Article VI, Section 28) Philippine 
constitution directed Congress to "evolve a progressive system of taxation". 
A progressive system of taxation assumes the imposition of a heavier tax burden for 
those who have larger incomes. Progressive taxes attempt to reduce the tax incidence of people 
with a lower ability to pay, as they shift the incidence increasingly to those with a higher ability to 
pay. 
However, bowing under pressures from the International Monetary fund, successive post-
Martial Law administrations instituted a regressive system of taxation where the relative tax rate 
or burden increases as an individual's ability to, pay decreases, thereby imposing enormous tax 
burdens on the poorest of the poor. 
The Value-Added Tax (VAT), which is an indirect tax, is widely criticized as a regressive 
form of taxation. VAT was first imposed under the Philippine taxation system by President 
Corazon Aquino in July 1987 when she signed Executive Order 273. The VAT was further 
institutionalized when former president Fidel Ramos signed into law RA 8424 or the Tax Reform 
Act of 1997. 
R.A. 8424 expanded the coverage of VAT to include basic necessities such as rice, corn, 
fresh, dried and canned fish, fresh pork, beef and poultry meat, fresh eggs, fresh vegetables, root 
crops, coffee, sugar, cooking oil, salt, laundry soap, detergents, firewood, charcoal, candles, and 
drugs classified as essential by the Department of Health. 
This was further exacerbated when the value-added tax was perpetuated and its 
coverage expanded by Republic Act 9337, which was signed into law by former President Gloria 
October 10, 2022
2:32 pm
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Macapagal-Arroyo on 24 May 2005 . Worse, under RA 9337, VAT was imposed on such socially 
volatile products as gasoline and other petroleum products. 
VAT, an indirect and "passable" tax, corners poor end-users who are not in a position to 
further pass on the tax. It is an "end of the line" tax. Everyone else in front or in between this line 
has the capacity to be immune. Worse, given the inefficiency of our country's tax collection and 
administration, those who can pass on this tax may even stand to profit from its imposition via the 
input and output VAT scheme, among others. 
VAT is a tax on the poor and the government certainly has many other options. The end-
users, especially those steeped in poverty, should not be made to pay for the government's 
inefficient tax collection.  No amount of government explanation can justify the creation or 
imposition of taxes that will mostly impact on the poorest of the poor, especially amid the 
economic fallout of the COVID-19 pandemic and worsening economic crisis. Even in the face of 
a fiscal crisis which admittedly calls for revenue generation, the government has the burden of 
proving that all other options are absolutely unavailable before it can even sell the idea of further 
taxing the poor. 
Taking the foregoing into consideration, VAT cannot be said to be a fair, just, equitable 
and progressive form of taxation. Thus, poor end-users have all the reasons to strongly oppose 
the imposition of VAT. 
Inflation peaked at a four-year high last July 2022 – the first month of the Marcos Jr. 
administration – amid promises of economic recovery and better standards of living for Filipinos. 
In August 2022, the Department of Trade and Industry (DTI) approved another round of price 
increases in the suggested retail price (SRP) for basic and prime commodities at a rate of 3.29% 
to 10% amid more expensive raw materials and packaging costs. Included in the goods with 
higher SRPs are: canned sardines (6%), 3-in1 coffee mix (8% and 10%), noodles (3.70%), 
candle (6%) and condiment prices (5-6%).  Price of sugar has surged to as high as P110 per kilo, 
allegedly due to shortages, making sugar-dependent goods even more expensive. Women 
intensely feel the crunch of these successive rounds of price hikes amid lack of decent work 
opportunities and significant cash aid.   
The continuing depreciation of the Philippine peso will further jack up the cost of imported 
goods including food commodities, with the Federation of Filipino Chinese Chambers of 
Commerce and Industry Inc (FFCCCII) estimating a 10-percent price hike on imported goods 
once businesses exhaust their inventories. Peso crashed to PhP59: USD1 territory early in 
October equivalent to 15.68 percent drop in value, making it one of the worst performing 
emerging market currencies.   
Based on the preliminary results of the 2021 Family Income and Expenditure Survey 
(FIES), food expenditures account for 42.9% of the total family income. Meanwhile, wages 
continue to lag behind rising prices, with the highest minimum wage in the country only at P570 
when the estimated living wage is already at P1,100 per day.    
Removing the VAT on commonly used food commodities would provide relief to a large 
number of consumers and stimulate economic activity especially as the more Filipinos have slid 
down to the ranks of the poor and unemployed. These savings mean more money for consumers 
to spend directly on their needs and less production cost for fuel-intensive businesses. 
If needed, there are available alternatives to VAT - alternatives that do not promote a 
regressive form of taxation but rather a progressive system of taxation that our Constitution 


 
 
mandates this august body to evolve. There are available revenue measures that do not further 
burden the poorest of our constituents. 
 
Oppositors of VAT point out that instead of burdening the poor with increases in taxes, 
the government could have reviewed the tax exemptions being provided mostly to the benefit of 
large corporations under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) 
Law amounting to P251 billion for 2020 and 2021. This amount, when collected, is enough to 
offset the foregone revenues from the removal of the unjust imposition of VAT on basic 
necessities which poor families consume on a daily basis. 
 
It is in this light that passage of this bill which exempts the imposition of the value added 
tax on basic necessities is urgently sought. The Marcos Jr. administration has no reason to 
refuse the certification of this measure as urgent.  
 
 
 
ARLENE D. BROSAS 
Gabriela Women’s Party 
 
 
 
 
 
  FRANCE L. CASTRO 
 
 
 
 
RAOUL DANNIEL A. MANUEL 
ACT Teachers Partylist 
 
 
 
 
 
Kabataan Partylist 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ________ 
Introduced by Honorable Representatives 
ARLENE D. BROSAS (Gabriela Women’s Party);   
FRANCE L. CASTRO (ACT Teachers Partylist);  
and RAOUL DANNIEL A. MANUEL (Kabataan Partylist) 
AN ACT EXEMPTING BREAD, SUGAR, COOKING OIL AND OTHER BASIC NECESSITIES 
COMMONLY CONSUMED BY POOR FILIPINOS FROM THE IMPOSITION OF THE VALUE 
ADDED TAX, AMENDING FOR THE PURPOSE SECTION 109 (1) OF REPUBLIC ACT 8424, 
OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997, AS AMENDED BY REPUBLIC 
ACT NO. 9337 AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section 109 (1), Chapter 1, Title IV of RA 8424, otherwise known as the Tax 
Reform Act of 1997, as amended by RA 9337, is hereby further amended to read as follows: 
SECTION 109. Exempt Transactions. - (1) Subject to the provisions of subsection (2) 
hereof, the following transactions shall be exempt from the value-added tax: 
“(A) xxx 
After paragraph A, insert the following paragraph (B). 
''(B) SALE OR IMPORTATION OF BASIC NECESSITIES CONSUMED ON A 
REGULAR BASIS BY POOR FAMILIES, WHICH INCLUDE BREAD; CANNED PORK, 
BEEF, FISH AND OTHER MARINE PRODUCTS; INSTANT NOODLES; BISCUITS; 
SUGAR (RAW AND REFINED); COOKING  OIL;  SALT;   LAUNDRY  SOAP; 
DETERGENTS; FIREWOOD; CHARCOAL; CANDLES; AND  DRUGS  CLASSIFIED 
AS  ESSENTIAL  BY  THE DEPARTMENT OF HEALTH; 
And re-letter the succeeding paragraphs as from C to X. 
SECTION 2. Implementing Rules and Regulations. The Secretary of Finance and Secretary of 
Trade and Industry shall, upon the recommendations of the Commissioner of Internal Revenue, 
promulgate not later than 15 days upon the effectivity of this Act, the necessary Rules and 
Regulations. All former rules and regulations pertaining to value-added tax on basic commodities 
commonly consumed by poor Filipinos shall be deemed revoked. 
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SECTION 3. Separability Clause. Any provision or portion of this act that may be declared 
unconstitutional shall not have the effect of nullifying other parts thereof. 
 
SECTlON 4. Repealing Clause. All laws, acts, decrees, executive orders, issuances, and rules 
and regulations or parts thereof which are contrary to, and inconsistent with any provisions of this 
Act are hereby repealed, amended or modified accordingly. 
 
SECTION 5.  Effectivity Clause. This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette or in newspaper of general circulation. 
 
 
Approved,