DOF: Collection of P2/liter fuel excise tax suspended for 3 months

admin   •   October 24, 2018   •   3952

 

 

MANILA, Philippines —The collection of additional P2.00 per liter in petroleum products in 2019 under the Tax Reform for Acceleration and Inclusion (TRAIN) law will be suspended for at least three months.

Finance Undersecretary Karl Chua revealed this before the Senate Economic Affairs Committee hearing earlier.

The TRAIN law specifically states that the collection of excise tax on oil products will be automatically suspended when the price of imported crude oil reaches the 80 dollars per barrel level for three consecutive months.

“Yes at the very least, and we will base that on prevailing oil price,” said Chua.

But the group Laban Konsyumer opposed the said timeline.

“January to March of every year is the slowest in demand whether food or non-food. Talagang ang demand mababa. Ipapasok mo yung suspension ng excise taxes mapipi-feel ba ng mga mahihirap yung immediate impact,” said Laban Konsyumer president Vic Dimagiba.

Senate committee on economic affairs chairman Sherwin Gatchalian is also not convinced with the DOF’s target.

“We would like to request for a suspension of six months at least, dahil yung first three months adjustment period yan,” said Gatchalian.

But the DOF said that based on its computations, the government may potentially lose around P41.6 billion in revenues if the suspension will last for several months to a year.

This would also affect more programs and government services will suffer.

To counter this, the Department of Budget and Management plans to implement budget cuts, including the procurement of new vehicles and other travel expenses such as lakbay-aral.

The budget for fuel subsidy will also be reduced.

The DBM, however, assured the fund allocated in 2019 for the Pantawid Pamilyang Pilipinong Program will remain.

Bangko Sentral ng Pilipinas (BSP), meanwhile, estimates that the country’s inflation rate will be reduced to 4.1 percent in 2019.

Based on their studies, BSP sees a point-two percent decline if fuel excise taxes will be suspended; and point seven percent if the rice tarrification law will take effect next year.

“If the suspension is for the portion of the year, the impact on inflation would be correspondingly smaller,” said BSP Assistant Governor Francisco Dakila.

Senator Gatchalian, meanwhile, plans to ask the DOF not to trim down the amount of subsidies appropriated for jeepney drivers.

The Senate will also push for a joint resolution in support of Malacañang’s planned order of the suspension of 2nd tranche of excise tax for petroleum products in 2019. — Nel Maribojoc | UNTV News & Rescue

House aims to pass bill on oil excise tax reduction before session break

Maris Federez   •   November 26, 2021

MANILA, Philippines — Before the session breaks in December, the leadership in the House of Representatives is determined to approve the proposed legislation that seeks to reduce excise taxes imposed on petroleum products.

House Deputy Majority Leader Representative Jesus ‘Bong’ Suntay said they also expect the Senate to do the same.

“I’m sure mapapasa namin yan before December on the part of the House. Pero ang mga kasamahan natin, mga senador natin, want to give it as a Christmas gift to Filipinos who have been hit hard by the pandemic,” Suntay said.

In the House version of the consolidated bill, the solons are pushing for a zero excise tax to be imposed on gasoline, diesel, and liquefied petroleum gas (LPG) for six months.

Excise tax on low octane gasoline used in tricycles, on the other hand, will be reduced to Php 4.35 per liter.

Suntay said the House leadership is determined to approve this the soonest time possible, noting that it is not only the transport sector who is being affected by the high price of petroleum products but the general public as well.

“Hindi naman yung transport sector who carries the burden of this additional excise tax. Lahat ng tao hindi lang public utility vehicle driver o jeepney drivers ang tinamaan, kundi lahat ng tao tinamaan ng pandemya. I believe kailangang naman na ibalik natin, di ba?” Suntay explained.

He further clarified that the Lower House is not seeking for the suspension of the excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) Law but to just cut a small percentage of the tax imposed by the said law. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

Suspension of fuel excise tax ‘detrimental’ to PH economic recovery – DOF

Robie de Guzman   •   November 15, 2021

MANILA, Philippines – The proposed suspension of excise taxes amid rising fuel prices will be inequitable and will threaten the country’s recovery and growth prospects, the Department of Finance (DOF) said Monday.

DOF Undersecretary and chief economist Gil Beltran issued the statement following calls by some groups for the suspension of fuel excise taxes after prices of petroleum products spiked for several consecutive weeks.

“The unrealized public spending and investments from the foregone revenues will be detrimental to our economic recovery and long-term growth,” Beltran said.

“A more equitable way to address the impact of higher fuel prices is to provide targeted support to the vulnerable groups, particularly the transportation sector, which the government has already committed to do,” he added.

The DOF estimates that suspending all fuel excise taxes and value-added tax (VAT) on fuel excise will result in foregone revenues amounting to P147.1 billion or around 0.7 percent of the gross domestic product (GDP) in 2022.

If the tax suspension covers only the fuel excise taxes and the VAT on fuel excise under Republic Act (RA) No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the government is estimated to lose P119.5 billion or around 0.5 percent of GDP in the same year, it added.

While consumption will be slightly higher at an estimated incremental of 0.6 to 0.7 percentage point, growth will actually be lower by 0.1 to 0.2 percentage point, if the excise tax and VAT on it are suspended, the department further stated.

Beltran also stressed that higher income households are estimated to benefit from the suspension more than lower income households.

“With the suspension of fuel excise taxes, we will lose the improvements we made under TRAIN in making the tax system more equitable, in which those who are more financially capable pay more taxes,” he said.

The DOF noted that higher income households are estimated to benefit 60 percent more than lower income households from the suspension of fuel excise taxes.

With the tax relief that would accompany the suspension of fuel excise taxes, the disposable income of the top 10 percent of households is estimated to increase by around 0.63 to 0.82 percent on average in 2022, it added.

Meanwhile, the disposable income of the bottom 50 percent of households is estimated to increase by only around 0.34 to 0.45 percent.

Beltran said a more equitable way to address the impact of higher fuel prices is to “provide targeted support to the vulnerable groups, particularly the transportation sector.”

The government earlier said it will release P1 billion fund for cash grants to 178,000 public utility vehicle drivers for the remaining months of the year through the Land Transportation Franchising and Regulatory Board (LTFRB).

Once spent, the cash grants are estimated to result to an incremental P2.9 billion pesos-worth of growth in the economy, the DOF said.

PSA: Inflation eased at 4.6% in October

Maris Federez   •   November 5, 2021

MANILA, Philippines —  The country’s headline inflation decelerated in October 2021, registering decreasing prices of basic goods and services, the Philippine Statistics Authority (PSA) announced Friday, November 5.

The PSA, in its Summary Inflation Report Consumer Price Index report, said the inflation eased further to 4.6 percent in October 2021 from 4.8 percent in September 2021.

It added that this brings the year-to-date inflation from January to October 2021 at 4.5 percent.

Inflation in October 2020 was posted at 2.5 percent.

“The main source of the downward trend of the October 2021 inflation was primarily due to the slower annual increment registered in food and non-alcoholic beverages index at 5.3 percent, from 6.2 percent in September 2021,” the agency said.

“Na-balance siya, nagkaroon tayo ng pagtaas sa petroleum and LPG na nagkaroon ng impact sa transport and component ng Household, Water, Electricity, Gas and other fuels, but the prices of food dropped. Of course, we saw that the meat prices particularly pork bumaba siya,” said Usec. Dennis Mapa, Philippine Statistics Authority head.

Contributing also to the downward trend in the overall inflation were the lower inflation recorded in the indices of the following commodity groups:

  • Alcoholic beverages and tobacco, 9.8 percent;
  • Education, 0.7 percent; and
  • Restaurant and miscellaneous goods and services; 3.8 percent.

On the other hand, inflation rates were higher in the indices of the following commodity groups:

  • Housing, water, electricity, gas, and other fuels, 4.4 percent;
  • Furnishing, household equipment, and routine maintenance of the house, 2.5 percent;
  • Health, 3.2 percent
  • Transport, 7.1 percent; and
  • Recreation and culture, 1.0 percent.

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