DoE readies data on price impact of oil excise tax hike
THE DEPARTMENT of Energy (DoE) is readying the data that legislators need should they decide to introduce a bill that will increase the excise tax on gasoline and impose the same on diesel, an official of the agency said.
“We will present the impact on prices... We will look into the details of that and what will be the effect, kung malaki or maliit (if the impact will be big or small),” said DoE Undersecretary Felix William B. Fuentebella on the sidelines of a forum hosted by ADR Research Institute and consumer organization CitizenWatch.
“It will be weighed by both the House and the Senate before they decide,” he said.
The Department of Finance (DoF) is reportedly planning to increase the excise tax on gasoline to P10 a liter next year, P10.40 per liter in 2018 and P12.17 per liter by 2022. For diesel, the department is looking at an excise tax of P6 per liter next year, P6.24 a liter in 2018 and P7.30 by 2022.
“The DoE will provide input as far as the effects of the effect of that is concerned, and then we will submit everything to the House of Representatives, and then the Senate,” Mr. Fuentebella said. “Any tax laws emanate from the House.”
The move aims to compensate for the forgone revenues that will result from the proposed reduction in personal income tax and corporate tax.
At present, the excise tax for gasoline is P4.35 per liter, while zero for diesel. On top of the excise tax, a value-added tax of 12% is levied on both diesel and gasoline.
“Dapat pag- aralang mabuti ’yan kasi ( It has to be studied extensively because) they’re taking advantage of the low oil prices that’s why they want to increase the excise tax,” said Sherwin T. Gatchalian, chairman of the Senate committee on energy.
“It has to be dynamic,” he said, adding that the excise tax should not be moving drastically when the prices of oil moves up or down. “We also need to look at the revenue that it will generate.”
Before this week’s more than one peso increase in the price of petroleum products, DoE data show that gasoline costs from P33.85 to P40.90 per liter, with P39.05 as the common price charged by oil companies. For diesel, the price per liter was between P23.96 and P27.10, with P25.85 as the common price.
“At the same time, we also need to understand and appreciate the anti- corruption efforts [ of the DoF],” Mr. Gatchalian said, adding that there are leakages and some are businesses were not paying the correct taxes.
He added that it might be best if the Bureau of Internal Revenue was first fully computerized before introducing any changes in the excise tax on petroleum products.
“What are the trade-offs? We have to look at that,” he said.
Last year, DoE data showed, the country’s consumption of gasoline was 5.22 billion liters, while diesel was 9.34 billion liters.
Mr. Fuentebella said the proposal to the adjust the tax rates should come from the DoF, with the House of Representatives either approving or rejecting that plan, and for the Senate to introduce amendments before the final approval of President Rodrigo R. Duterte.