Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. _____________ 
Introduced by REPRESENTATIVE MANUEL ANTONIO F. ZUBIRI 
EXPLANATORY NOTE 
Petroleum products are characterized as socially sensitive products affecting almost all 
aspects of commercial business. It is a key input to production which affects prices of goods 
reaching all consumers. As such, any increase in the prices of petroleum products and the 
additional burden of VAT and excise tax will have an impact on the lives of every Filipino 
as it also puts upward pressure on the prices of basic goods and services, transportation and 
energy cost.   The Philippines, as an oil importer, is also vulnerable to price changes in the 
international market and unpredictable geopolitical tensions in oil producing countries. 
Republic Act No. 9337 or the RVAT Law lifted the value-added tax (VAT) exemption of 
oil products in 2004 to help shore up government collections in the face of a looming fiscal 
crisis. In addition to the VAT, Republic Act No. 10963 or the Tax Reform for Acceleration 
and Inclusion (TRAIN) Law further increased the excise tax on petroleum products over a 
period of three years beginning January 2018. As of January 2019, ₱9 per liter excise tax 
is imposed gasoline, ₱4.50 for diesel, ₱4 for kerosene, and ₱2 for every kilogram of 
cooking gas or liquified petroleum gas (LPG).  
Thus, this bill seeks to restore the VAT exempt status of petroleum and petroleum products 
to temper the impact of fuel taxes on pump prices and prices of basic goods and services. 
The additional income from lifting the VAT on oil products will hopefully provide extra 
purchasing power to help Filipinos cope with the inflationary effect brought about by the 
increase in other taxes levied by government especially in this time of the pandemic. 
Thus, approval of this bill is earnestly sought. 
MANUEL ANTONIO F. ZUBIRI 
Representative 
Third District, Bukidnon  
October 28, 2021
9:11 am
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. _____________ 
Introduced by REPRESENTATIVE MANUEL ANTONIO F. ZUBIRI 
AN ACT 
CLASSIFYING THE SALE OR IMPORTATION OF PETROLEUM PRODUCTS 
AND RAW MATERIALS IN THE MANUFACTURE THEREOF AS VALUE-ADDED TAX-
EXEMPT TRANSACTIONS, AMENDING FOR THE PURPOSE SECTION 109 (1) OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, 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, Value-Added Tax of Republic Act No. 8424, 
otherwise known as the Tax Reform Act of 1997, as amended by Republic Act No. 9337, is hereby 
further amended to read as follows: 
“SEC. 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 
“(B) xxx 
“(C) SALE OR IMPORTATION OF PETROLEUM PRODUCTS, EXCEPT LUBRICATING 
OIL, PROCESSED GAS, GREASE, WAX, PETROLATUM, AND COAL AND NATURAL 
GAS IN WHATEVER FORM OR STATE SUBJECT TO EXCISE TAX IMPOSED UNDER 
TITLE VI; 
“(D) SALE OR IMPORTATION OF RAW MATERIALS TO BE USED BY THE BUYER OR 
IMPORTER HIMSELF IN THE MANUFACTURE OF PETROLEUM PRODUCTS SUBJECT 
TO EXCISE TAX, EXCEPT LUBRICATING OIL, PROCESSED GAS, GREASE, WAX AND 
PETROLATUM; 
“x x x.” 
SEC. 2. Implementing Rules and Regulations. – The Secretary of Finance shall, upon the 
recommendation of the Commissioner of the Bureau of Internal Revenue, promulgate not later than 
15 days upon the effectivity of this Act, the necessary Rules and Regulations for the effective 
implementation of this Act. 
SEC. 3. 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. 4. Separability Clause. – If any provision of this Act shall be held unconstitutional or invalid, 
the other provisions not otherwise affected shall remain in full force and effect. 
SEC. 5. Effectivity Clause. - This Act shall take effect after fifteen (15) days from publication in at 
least two (2) newspapers of general circulation. 
Approved, 
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