Imposition of VAT and excise taxes on goods brought into FEZs is unconstitutional
Remember Revenue Regulations (RR) 2-2012? This was issued during the previous administration purportedly due to rampant smuggling of petroleum and petroleum products, resulting in substantial revenue losses. Based on said regulations, it became mandatory for the government to immediately implement corrective measures to stop this smuggling activity to ensure the collection of correct taxes. Despite the tax and duty- free status of goods brought into free port and economic zones based on existing laws, the regulations required the payment of value-added and excise taxes on all petroleum and petroleum products that are imported and/or brought directly from abroad to the Philippines, including those brought into free port and economic zones (FEZs).