​SEN. Mark Villar has filed Senate Bill 1916, which aims to lower the value-added tax (VAT) imposed on the sale of goods, services and imports. ​If enacted, the measure will amend Sections 106(A), 107(A) and 108(A) of the National Internal Revenue Code of 1997. ​In his explanatory note, Villar cited the mandate under Article VI, Section 28(1) of the 1987 Constitution of the Philippines, which directs Congress to establish a progressive taxation system — one in which tax rates increase according to a taxpayer’s ability to pay. ​Villar said VAT, by design, is considered a regressive tax because it is imposed uniformly on consumption regardless of income level. ​”VAT disproportionately burdens lower-income persons and hinders an effective redistribution of wealth,” the senator said. ​He added that the current tax structure can diminish purchasing power, narrow business profit margins, and discourage entrepreneurship and capital investment — factors that could slow economic growth. ​The Philippines currently imposes a 12-percent VAT, one of the highest consumption taxes in Southeast Asia. By comparison, Indonesia imposes an 11-percent VAT, Vietnam imposes a 10-percent VAT and Singapore has a 9-percent goods and services tax. ​According to Villar, reducing the VAT rate could help improve the country’s competitiveness within the region. ​The proposed reduction is projected to increase the annual disposable income of the average Filipino household by about P8,000, potentially stimulating consumer spending and supporting business expansion. ​Supporters of the bill say the tax cut could encourage job creation, entrepreneurship and broader economic activity, particularly as households gain more spending power. ​To address concerns about possible revenue losses, the bill includes a fiscal safeguard. It authorizes the president to temporarily restore the VAT rate to 12 percent for a specific year if the projected fiscal deficit exceeds the target set by the Development Budget Coordination Committee as a percentage of the country’s gross domestic product. ​The provision aims to ensure fiscal stability while allowing the government flexibility in managing budget deficits. ​Senate Bill 1916 will undergo committee review, public hearings and plenary deliberations before it can advance to the House of Representatives for approval.