Republic Act 9337

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Republic Act 9337, more commonly known as the E-Vat or the R-Vat Law, is one of many measures intended to overhaul and simplify the tax system in the Philippines. Passed in May 2005, the law was supposed to take effect on 1 July 2005 but was initially blocked by a temporary restraining order by the Supreme Court. It was then implemented on 1 September 2005. RA 9337 is a consolidation of three bills, namely House Bill No. 3555, House Bill No. 3705, and Senate Bill No. 1950. The Senate version was primarily authored by Sen. Ralph Recto.



According to the E-Vat primer, through RA 9337 the E-Vat will now cover the following goods and services previously not subject to VAT:

  • Petroleum products and other indigenous fuels
  • Power and electric cooperatives
  • Services rendered by doctors, lawyers and other professionals who earn more than P1.5 million annually
  • Domestic carriage of passengers by air and sea
  • Non-food agricultural products
  • Works of art, including literary works and musical compositions

Because the E-Vat's coverage was expanded, several measures were instituted to mitigate its impact:

  • Reduction of excise tax on gasoline, diesel, kerosene and bunker fuel
  • Removal of franchise tax on domestic airlines and common carriers tax on domestic shipping
  • Increase in presumptive input VAT of agroprocessors from 1.5% to 4%
  • VAT marginal threshold increase from P550,000 to P1.5 million per year
  • Rental threshold increase from P8,000/mo. to P10,000/mo.
  • Real property threshold increase from P1 million to P2.5 million


According to the E-Vat Primer, the following commodities are exempt from the tax:

  • Agricultural and marine products in their original state (ex. vegetables, meat, fish, fruits, eggs, rice, etc.)
  • Sale of low-cost houses and lots not exceeding P2.5 million
  • Lease of residential spaces not exceeding P10,000 monthly
  • Sales of persons and establishments earning not more than P1.5 million annually, which may include sari-sari stores, carinderias, street vendors
  • Educational services rendered by both public and private educational institutions
  • Books, newspapers, and magazines
  • Services rendered by doctors and lawyers who do not earn more than P1.5 million annually

In an article posted on the Sun.Star Cagayan de Oro website, Maricel Arthur of the BIR also added that the importation of personal and household effects belonging to those who are going to resettle in the country is also exempted from the E-Vat. Other laws have also created additional exemptions from E-Vat, such as the Expanded Senior Citizens Act authored by Sen. Pia Cayetano, which gives Filipinos 60 years old and above a 20% discount on purchases on top of exemption from the E-Vat.


The E-Vat has come under fire from many sectors and even from the different ends of the political spectrum, arguing that even if it was a consumption-based tax, it still became an additional burden for the poor. Among those who voiced their opposition to the measure was vice-presidential candidate and Makati Mayor Jejomar Binay, which cited a 2008 study of the Ibon Foundation as well as studies of the World Bank and International Monetary Fund to say that there was no justification for E-Vat. Several lawmakers have already filed bills to repeal or amend RA 9337. In the Senate, Senators Manuel Roxas III and Francis Escudero filed separate bills seeking the removal of the 12% E-Vat on oil, while Sen. Ana Consuelo "Jamby" Madrigal filed Senate Bill 24 which sought to repeal the entire law. According to Binay, however, Roxas previously supported the bill while it was still in the Senate.

Meanwhile, Gabriela Party-list Representatives Liza Maza and Luz Ilagan filed a similar measure in the Lower House, also seeking the complete repeal of the said law.




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