A measure suspending the collection of the increase in excise taxes on gasoline, diesel, and other oil products for three years, from 2022 to 2025 has been filed at the House of Representatives.
Deputy Speaker Rufus Rodriguez filed on Thursday House Bill No. 10246, which proposes to temporarily suspend the collection of excise taxes on fuel products based on the increased rates imposed in Section 43 of Republic Act No. 10963, or the Tax Reform Acceleration and Inclusion (TRAIN) Law until the country has fully recovered from the coronavirus disease (Covid-19) pandemic.
A copy of the bill was sent to the media on Friday.
Rodriguez said once the suspension takes effect, the government would collect excise levies on oil products based on the old rates contained in the National Internal Revenue Code or before the TRAIN Law.
Rodriguez noted that Section 43 includes a suspension provision covering the period 2018 to 2020 whenever crude oil prices exceeded USD80 per barrel.
“Unfortunately, the provision for the suspension of the increase of excise taxes can only be applied until 2020. Then the Covid-19 pandemic happened. Jobs were lost, businesses closed and the economy suffered,” he said in the explanatory note of the bill.
He said at present, the country is only starting to gradually reopen its economy and people are beginning to go back to work.
He, however, pointed out that the weekly increases in the pump prices of oil products are adding to the people’s suffering.
He cited that the price of unleaded gasoline went up by PHP7.20 per liter and diesel by PHP8.65 per liter for the past eight weeks.
Rodriguez said prices of unleaded gasoline and regular diesel in Metro Manila are now around PHP70.44 and PHP50.17 per liter, respectively; while in the Visayas, unleaded gasoline costs PHP73.96 per liter and diesel sells for PHP64.95 per liter.
In Mindanao, he said unleaded gasoline sells for PHP74.85 per liter and diesel for PHP70.65 per liter.
He argued that the increases in pump prices cause a domino effect on the prices of consumer goods, bringing more suffering to the people.
“One way to help the Filipino people is to temporarily suspend the collection of the increase in excise taxes on oil products imposed under the TRAIN Law until the country has fully recovered from the Covid-19 pandemic,” he said.
Rodriguez said once the adjustments are suspended, the old rates that would apply would be PHP4.35 and PHP5.35 per liter on regular gasoline and unleaded gasoline instead of the present PHP10, while diesel, kerosene, and liquefied petroleum gas would not be imposed any excise tax.
The suspension should result in a corresponding decrease in the prices of consumer goods and services, he added.
Earlier, the Department of Finance (DOF) and the National Economic and Development Authority opposed the recommendation of suspending the excise tax on petroleum products despite the rising oil prices.
The DOF said should the excise tax on petroleum products be suspended, the government stands to lose PHP131.4 billion in revenues — PHP24.7 billion in excise revenues and PHP106.7 billion in incremental revenues under the TRAIN Law.
Deputy Speaker Bernadette Herrera, meanwhile, thumbed down the “politically expedient” solution of either suspending or trimming the excise tax on petroleum amid rising pump prices, as it would be “economically disastrous”.
Herrera said the national government budgets this 2021, 2022, and 2023 would be dependent on the approximately PHP100 billion per year in excise tax on petroleum.
“Suspending or trimming that excise tax even for just three months would be fiscally unwise and possibly economically disastrous, given the fact there is no international oil crisis now nor expected in the months ahead,” Herrera said.
Herrera said instead of shaving part of that excise tax on petroleum, the more prudent solution is a combination of fixes that improves supply flows, increases local buffer stocks, removes customs fees and hauling charges, and issues purchase discount vouchers to the poor and low-income consumers.
Source: Philippines News Agency
