Thursday, May 24, 2018

Government is Now Eyeing to Suspend Excise Tax on Fuel


The aches from the continuous fuel price increase may soon be over as the Philippine government mulls to suspend the excise tax on fuel. This news comes just a week after Budget Secretary Benjamin Diokno said that the suspension of TRAIN “will do more harm than good.”

CNN Philippines reports that the government is now seriously considering the suspension of the excise tax on fuel if world prices hit US$ 80 per barrel. This is according to Presidential Spokesperson Harry Roque.

Under Section 43 of Republic Act 10963, otherwise known as the TRAIN Law, provides a specific clause to suspend fuel excise tax once Dubai crude oil prices reaches US$ 80 per barrel for a period of three months before the scheduled next increase of fuel excise taxes.

To recap, under TRAIN, gasoline was slapped with a P7 per liter of tax in 2018, P9 in 2019 and P10 in 2020. Meanwhile, diesel gets hit with P2.50 in 2018, P4.50 in 2019, and P6 in 2020. Take note that these prices are not inclusive of Value Added Tax or VAT.

While the government’s right hand is considering to suspend the excise tax on fuel, its left hand, in this case the Department of Finance, says that the rising prices on consumer goods should not be a cause for concern.

In a report published by ABS-CBN News has Finance Undersecretary Karl Kendrick Chua saying that the “4-percent inflation is not due to tax reform.” His statement is echoed by Finance Secretary Carlos Dominguez who said that “two-thirds of the 4.5 percent inflation in April was due to the demands of a rapidly expanding economy.”

Chua goes on to say that the spike in goods and services was induced by the peso depreciation, the increase in crude oil prices, or even profiteering. He says that the tax reform could spike inflation by a maximum of 0.7 percent.

In fact, Chua clarified that Section 43 allows only for the delay of the next tranche of increases and not the removal of the excise tax altogether.

Sources: CNN Philippines, ABS-CBN News

1 comment:

  1. They should've spared the fuel from this in the first place. Basic knowledge naman sa Pilipinas na once tumaas presyo ng fuel domino effect na sa lahat.

    Excise tax na nga sa mga goods, samahan mo pa ng excise tax sa fuel plus the ever changing cost in the world market... tada!! Bravo government!

    Doesn't matter how much budget we create from TRAIN, what matters is how we spend our nation's money. Screw this alligators.

    ReplyDelete

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