- October 15, 2018
- Posted by: admin
- Category: Daily News
- MALACAÑANG and Congress have agreed on the need to suspend an oil tax hike set in Jan 19, a move one senior Finance official said is justified given current world crude price forecasts though officials stopped short of confirming that the suspension would go ahead.
- The development comes as headline inflation has lately been hitting multiyear peaks — largely on surging world crude prices — averaging 5% on a ytd basis as of Sep against the central bank’s 2-4% target range for full-year 2018.
- Mid-term elections are also due in May 19. Special Assistant to the President (SAP) Christopher T. Go said on 14 Oct 18 that President Rodrigo R. Duterte and his Cabinet have discussed this issue.
- A majority of senators has also submitted a letter to Mr. Duterte on 9 Oct 18 seeking such a move even before the “trigger period” set by Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) that took effect from Jan 18.
- For his part, President Duterte has been coy on the matter though he has indicated that the government has no control over rising inflation, particularly when it comes to global oil prices.
- That law increased fuel excise taxes by PHP2.5 per liter in 2018, and is scheduled to raise the levy by PHP2 and PHP1.5 per liter in 2019 and 2020, respectively, totaling a PHP6 excise tax hike.
- The law suspends the hike automatically should average crude oil price, based on Dubai, reach USD80 per barrel in these last three months.
- “But to arrest the rising price of oil and its effects on the inflation rate, we will defer implementing it until the right time,” Mr. Go said.
- Go said the impact of rising prices on the poor would be the government’s primary consideration in deciding whether to put on hold the next round of oil excise taxes hike.
- He said the administration would also consider factors like the revenue impact of the proposal and the effects of inflation in making a decision.
- According to Finance Secretary Carlos Dominguez, however, President Duterte will soon order the suspension of the increase in excise taxes for diesel and gasoline.
External Link: https://www.bworldonline.com/pressure-mounts-to-defer-oil-tax-hike
External Link: https://www.philstar.com/business/2018/10/14/1859989/dof-suspension-fuel-tax-hike-announced-early-to-anchor-inflation-expectations
External Link: https://www.philstar.com/headlines/2018/10/15/1860186/dof-suspend-fuel-tax-hike