EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE 
S.B. No. 2320
E-FILED
Sr O
July 21, 2021
date:
08:00 am
time:
INDEX
GILLS
Introduced by SENATOR IMEE R. MARCOS
AN ACT GRANTING THE PRESIDENT OF THE PHILIPPINES THE POWER TO 
LOWER THE RATE OR SUSPEND THE IMPOSITION OF VALUE-ADDED TAX 
ON PETROLEUM PRODUCTS FOR A LIMITED PERIOD OF ONE (1) YEAR IN 
TIMES OF NATIONAL EMERGENCY OR STATE OF CALAMITY, AMENDING 
FOR THE PURPOSE SECTIONS 106 AND 107 OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED
EXPLANATORY NOTE
Article II, Section 9 of the Constitution provides that the "State shall promote a 
just and dynamic soda! order that will ensure the prosperity and independence of the 
nation and free the people from poverty through policies that provide adequate social 
services, promote full employment, a rising standard of living, and an improved quality 
of life of all."
The Filipino people and workers have felt the severe impact of the COVID-19 
pandemic. While the Philippines has been gradually recovering from the effects of the 
pandemic, as of July 1, 2021, the Department of Labor and Employment (DOLE) 
reported an unemployment rate of 7.7% (3.730 million unemployed)1. While we see 
slight improvement as compared to the unemployment rate of 8.7% in the first half of 
2021, it is undeniable that a vast number of Filipinos are still unemployed and without 
a stable source of income.
Since the implementation of Republic Act No. 10963, or the " Tax Reform for 
Acceleration and Inclusion (TRAIN) Law" fuel prices have steadily risen. These oil price 
hikes have had a noticeable domino effect on the prices of basic goods and services, 
such as agricultural products, transportation, food, electricity and other essentials. The 
recent price hike imposed by oil companies has reportedly reached increases of PI. 15
1 STATEMENT ON THE MAY 2021 LABOR FORCE SURVEY SECRETARY SILVESTRE H. BELLO III, July 1, 2021, available at
httDs://www.dole.eov.ph/news/statement-of-secretarv-silvestre-h-bello-iii-on-the-mav-2021-lnbor-force-5iirvey/i [last
accessed July 13, 2021].


for gasoline, P0.60 for diesel, and P0.65 for kerosene per liter. Since January 2021, fuel 
prices per liter have already increased by P13 for gasoline, PIO for diesel, and P9 for 
kerosene.
The higher cost of petroleum products has resulted in inflation being above the 
government target of 2-4% for 2021, with inflation at 4.2% in January, 4.7% in 
February, 4.5% in the months of March, April and May, and 4.1% in June. While 
inflation cannot be fully attributed to the increase in oil prices, the Bangko Sentral ng 
Pilipinas (BSP), through statements made by Governor Benjamin Diokno this year, has 
consistently identified increases in oil prices as possible upward pressure in inflation.
The higher costs of goods and services that are, in part, due to the uptick of fuel 
prices, are expectedly passed on to the ordinary consumer who may still be unemployed 
but has no choice but to deal with the rising prices of everyday essential commodities.
In view of the current economic and employment situation of the country 
resulting from the COVID-19 pandemic, there is a need to give some relief to the 
ordinary Filipino and ensure that they are able to survive and recover during this 
pandemic. As a means of easing the financial burden of the public, this bill proposes to 
grant the President of the Philippines the power to temporarily lower the rate or 
suspend the imposition of Value-Added Tax on petroleum products in times of national 
emergency or a state of calamity, such as this pandemic. To ensure fiscal sustainability 
on the part of the Government, excise taxes imposed on the petroleum products will 
be retained.
In view of the foregoing, the approval of this bill is earnestly sought.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S.B. No. 2320
FILED
NDbX
SILLS
Introduced by SENATOR IMEE R. MARCOS
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AN ACT GRANTING THE PRESIDENT OF THE PHILIPPINES THE POWER TO 
LOWER THE RATE OR SUSPEND THE IMPOSITION OF VALUE-ADDED TAX 
ON PETROLEUM PRODUCTS FOR A LIMITED PERIOD OF ONE (1) YEAR IN 
TIMES OF NATIONAL EMERGENCY OR STATE OF CALAMITY, AMENDING 
FOR THE PURPOSE SECTIONS 106 AND 107 OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
SECTION 1. Section 106 of the National Internal Revenue Code of 1997, as 
amended, is further amended to read:
"Section 106. Value-added Tax on Sale of Goods or Properties. -
(A)Rate and Base of Tax - There shall be levied, assessed and 
collected on every sale, barter or exchange of goods or properties, a value- 
added tax equivalent to twelve percent (12%) of the gross selling price or 
gross value in money of the goods or properties sold, bartered or exchanged, 
suck tax to be paid by the seller or transferor. PROVIDED, THAT THE 
PRESIDENT OF THE PHILIPPINES, BY VIRTUE OF AN EXECUTIVE 
ORDER AFTER CONSULTATION WITH THE SECRETARY OF FINANCE, 
MAY LOWER THE RATE OR SUSPEND THE IMPOSITION OF THE 
VALUE-ADDED TAX ON THE SALES OF PETROLEUM PRODUCTS IN 
TIMES OF A DULY DECLARED STATE OF NATIONAL EMERGENCY OR 
STATE OF CALAMITY FOR A PERIOD NOT EXCEEDING ONE (1) YEAR 
UPON DETERMINATION BY THE PRESIDENT THAT SUCH 
LOWERING OF RATE OR SUSPENSION IS NECESSARY TO PROTECT 
PUBLIC INTEREST AND WELFARE.
XX X."


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SEC. 2. Section 107 of the National Internai Revenue Code of 1997, as 
amended, is further amended to read:
"Section 107. Value-added Tax on the Importation of goods. -
(A) In General. - There shall be levied, assessed and collected on 
every importation of goods a value-added tax equivalent to twelve percent 
(12%) based on the total value used by the Bureau of Customs in determining 
tariff and customs duties, plus excise taxes, if any, and other charges, such 
tax to be paid by the importer prior to the release of such goods from customs 
custody: Provided, That where the customs duties are determined on the 
basis of the quantity or volume of the goods, the value-added tax shall be 
based on the landed cost plus excise taxes, if any. PROVIDED FURTHER, 
THAT THE PRESIDENT OF THE PHILIPPINES, BY VIRTUE OF AN 
EXECUTIVE ORDER AFTER CONSULTATION WITH THE SECRETARY 
OF FINANCE, MAY LOWER THE RATE OR SUSPEND THE IMPOSITION 
OF THE VALUE-ADDED TAX ON THE IMPORTATION OF PETROLEUM 
PRODUCTS IN TIMES OF A DULY DECLARED STATE OF NATIONAL 
EMERGENCY OR STATE OF CALAMITY FOR A PERIOD NOT 
EXCEEDING ONE (1) YEAR UPON DETERMINATION BY THE 
PRESIDENT THAT SUCH LOWERING OF RATE OR SUSPENSION IS 
NECESSARY TO PROTECT PUBLIC INTEREST AND WELFARE.
X X X."
SEC. 3. Implementing Rules and Regulations. - Within thirty (30) days from the 
effectivity of this Act, the Secretary of Finance shall, upon recommendation of the 
Commissioner of the Bureau of Internai Revenue, promulgate the rules and regulations 
necessary for its effective implementation.
SEC. 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.
SEC. 5. Separability Clause. - If any portion or provision of this Act is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall 
remain in force and effect.
SEC. 6. Effectivity Clause. -This Act shali take effect fifteen (15) days after its 
complete publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines.
Approved,