Philippines: Fuel excise tax may be suspended

  • As fuel prices soar, Malacañang expressed openness on 22 May 18 to the suspension of hefty excise taxes on diesel, liquefied petroleum gas (LPG), kerosene and bunker fuel that is used to produce electricity.
  • Magdalo party-list Rep. Gary Alejano said that under the Tax Reform for Acceleration and Inclusion (TRAIN) law, the tax on these products must be suspended when the price of crude oil in the world market reaches USD80 per barrel. Malacañang agreed.
  • “The price of crude oil is reaching a multi-year high of USD80. Brent crude is already at USD79.35 per barrel, while Dubai crude is at USD74.45,” Alejano said on 22 May 18.
  • He said people are already reeling from increases in the cost of diesel and other oil products and their domino effect on prices of products and services.
  • Administration officials have admitted that the monthly increases in consumer prices since Jan 18 were largely due to oil taxes imposed under TRAIN.
  • TRAIN levied a total of PHP6 tax on diesel, cooking gas, kerosene and bunker fuel. The levy was spread over three years up to 2020. In Jan 18, the total increase in the retail price of diesel was almost PHP3 per liter.
  • Opposition is calling on the House of Representatives to review the law and to suspend it in the meantime, while some representatives want it repealed.
  • Quirino Rep. Dakila Cua, who chairs the committee on ways and means, said he was open to reviewing but not suspending TRAIN as it “would affect the national coffers.”
  • Administration officials have started shooting down the review and repeal proposals in the House and the Senate. According to the Bureau of Internal Revenue, taxes on oil products imposed under TRAIN brought in an additional PHP4.73bn in 1Q18.
  • On 22 May 18, militant groups sought the signatures of commuters at the MRT-North Avenue station in Quezon City, hoping to gather enough support for their campaign to convince lawmakers to tackle urgent bills seeking to repeal or suspend the TRAIN Law before Congress goes on break on 1 Jun 18.
  • Socioeconomic Planning Secretary Ernesto Pernia called for stronger price monitoring of goods and strict enforcement of sanctions against erring businessmen found to be unjustly raising prices amid the implementation of the TRAIN Law.
  • Finance Secretary Carlos Dominguez III said TRAIN has been “unfairly blamed” for the elevated inflation rate as rising prices of imported commodities also come into play.
  • Finance Undersecretary Karl Kendrick Chua said pursuing the administration’s tax reform program is necessary to maintain the stable and positive outlook assigned by credit rating agencies to the Philippine government in Apr 18.

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