This paper evaluates the economic feasibility and policy implications of reducing the value-added tax (VAT) rate from 12% to 10% as proposed under House Bill No. 4302. While a two percentage point reduction is commonly viewed as fiscally costly, the analysis finds that prevailing revenue-loss estimates overstate the true impact because they exclude second‑order effects such as increased household consumption, expanded formal‑sector participation, and enhanced private investment. The paper further shows that inefficiencies and corruption in public spending, particularly in infrastructure, generate losses that exceed the projected revenue decline. Additional fiscal space may also be realized through government right-sizing and strategic VAT base broadening via the rationalization of exemptions. Overall, the findings suggest that the proposed VAT reduction is fiscally manageable and likely to yield positive economic effects. Furthermore, a tax cut can serve as a critical first step in restoring trust in government institutions, signaling the administration’s confidence in curbing corruption, improving spending efficiency, and protecting taxpayer resources.