Philippines: Senate eyes 6-month fuel tax hike suspension in 2019

  • Senate committee on economic affairs chairperson Sherwin Gatchalian is proposing a 6-month suspension of the fuel tax hike stipulated in the Tax Reform for Acceleration and Inclusion (TRAIN) law in 2019.
  • In the Senate hearing on the issue held on 24 Oct 18, Gatchalian said the longer period of suspension would enable both oil companies and consumers to adjust from the higher prices being experienced in 2018.
  • Gatchalian also clarified that implementing agencies like the Department of Finance (DOF) can suspend the fuel tax hike on their own.
  • “I think they (DOF) will now operationalize it through executive order…. A joint resolution from both Senate and [the House of Representatives] will strengthen it,” he said.
  • The law is silent on when tax hikes can be reimposed. The DOF released an economic bulletin indicating that Dubai crude oil prices may taper off soon, but maintained that the 2019 fuel tax hike would be suspended.
  • As oil prices remain high, Gatchalian said he will push to retain the PHP20,515 cash aid for jeepney drivers under the Pantawid Pasada program. Economic managers previously said they would cut the cash transfer by half amid the looming fuel tax hike suspension.
  • Gatchalian also called on other implementing agencies like the Department of Transportation (DOTr) and the Department of Social Welfare and Development (DSWD) to speed up the distribution of unconditional cash transfers to the poor.

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