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