Because both the value-added tax and the excise tax are sales taxes or indirect taxes, regardless of which product they are imposed on and whatever percentage rate or amount is set, they are a regressive form of taxation contrary to the declared state policy in the Philippine Constitution on uniform, equitable and progressive taxation (Article 6, Section 28).
So let’s stop debating whether this system is just or fair because when the VAT/EVAT and TRAIN laws were enacted, the primary consideration of economic managers and legislators was a broader tax net and efficient collection to meet revenue targets, at the expense of social justice and the equity of progressive taxation. Collection through sales tax is easier, more uniform, and broader.
Let’s just understand where the economists who oppose the suspension of VAT and excise taxes on petroleum products are coming from. Acting Executive Secretary (and former finance secretary) Ralph Recto is not the only one who is pro-VAT and excise tax. Also take note that the Philippines has the highest VAT rate (12%) among the members of the Asean (Association of Southeast Asian Nations). The others are only at 5–10%.
VAT collection in 2024 was ₱640.85 billion. The Bureau of Customs and economists say that ₱330 billion in collections would be lost if excise tax and VAT on oil were suspended. So where will the ayuda (aid) during the crisis come from? Why throw away what is already in hand? As they say, you can get more out when you’ve put something in. Rather than borrowing again—the payment of which the people will ultimately have to bear—it’s easier to collect from taxpayers’ pockets than to pick up stones to smash on our own heads.
In short, the government can provide more ayuda when it has collections. And targeted, one-time, small-scale aid supposedly has more impact than letting car owners benefit more from tax suspension. Let Batman take care of minimum wage earners and those above minimum wage but who are not on the ayuda list. The middle class is used to swimming through inflationary crises. The rich can easily handle this one.
Let’s revisit the progressive taxation principle in the Constitution. This is achieved through direct taxes such as personal income tax (PIT), corporate income tax (CIT), and others like capital gains, donor’s, and estate taxes.
Income tax collections in 2024 reached ₱1.53 trillion, more than half (50.19%) of which came from withholding taxes of workers in the private and public sectors, and around ₱100–₱180 billion came from business owners (including those listed here) and professionals who individually file their income tax with the Bureau of Internal Revenue. CIT is second in income tax collections, but it’s easy to say that all corporate income is also wealth created by workers employed by companies and corporations.
But did you know that even though rich business owners pay PIT and CIT, they still have an excessive amount left of their wealth? This means they could be subjected to additional taxes and would still remain extremely wealthy. This type of tax is called a wealth tax—or a solidarity tax, as others call it—which has not yet been enacted into law in the Philippines.
According to several studies, imposing a 1–3% wealth tax on the 50 richest Filipinos would immediately generate at least ₱230 billion for the government. This could even reach ₱1 trillion if the net is cast a bit wider to include more wealthy people within the 1% of the pyramid.
Take a look at the Top 13 on this Forbes list, as of March 2026. Their combined net worth is $38 billion. At the current exchange rate ($1:₱60), that’s a whopping ₱2.28 trillion. Just imposing an additional 1% wealth tax on their excessive wealth would immediately generate ₱22.8 billion, ₱45 billion if 2%, and ₱228 billion if 10%.
Let’s simplify it even more. It’s not something like a war of aggression on billionaires’ pockets. How about just a contribution (solidarity) from these 13 during a time of crisis? What if they contributed ₱20 for every ₱1,000 they have? (“Where will your ₱20 get you?” as Cornetto once said.) Small change, but that would still be ₱45 billion when pooled together. Could be ₱30–₱50 per ₱1,000, right? If they are as generous as some contractors, ₱100 per ₱1,000 probably wouldn’t hurt their pockets either.
If that happens, the whole country would be happy with their ₱228-billion contribution. That would be true sacrifice and love of country.
It would be easy enough, but will they make the contribution? Or must the state compel them through law?
Ricky Razon is No. 1 on the list. He is the owner of Prime Energy, along with Dennis Uy of Udenna, who currently holds the 15-year extended Service Contract 38 for Malampaya, reportedly earning $1.5 million per day. He also owns MORE Power, the distribution utility in Iloilo, Central Negros, and Bohol.
Ramon Ang, No. 2, owns Petron and San Miguel Global Power, the largest generation company in the Luzon grid. Henry Sy Jr. is part of the consortium that owns NGCP (National Grid Corporation of the Philippines). Manny Villar also owns power companies.
These billionaires are players in the ₱1-trillion power industry, and they are joined by others in the Forbes list of 50 Richest, such as the Aboitiz, Pangilinan, Gokongwei, Lopez, Ayala, Consunji, and Alcantara families. This means that as oil and electricity prices rise, they also earn big, adding to the income from their other businesses, where price hikes on every product and service they produce are also passed on to the consumer. They should also be charged a windfall profit during the crisis.
What do you say to that, Mr. Speaker, Mr. Senate President, Mr. President?
There is no doubt that the Top 1% are more capable of sacrificing a small portion of their excess wealth compared to the 99% of our population. But if they dislike the concept of a solidarity contribution, then a wealth tax is truly the right path.
And the flood control scam is still awaiting resolution, so we should not ignore the totality of funds lost due to government corruption. It is estimated at ₱700 billion to ₱1.6 trillion annually. That’s larger than the VAT and excise tax collections. For this, emergency power is not needed; during a crisis, jailing the corrupt should not be suspended. CS
Wilson Fortaleza is deputy secretary general of the Partidong Manggagawa.
