Price hikes to lag as inventory taxed at old rates hits stores
THE Department of Trade and Industry (DTI) said the expected price increases arising from the new tax regime will take some time to manifest at retail level as goods taxed at the old rates move out of warehouses into stores.
Trade Secretary Ramon M. Lopez in a statement on Wednesday said taxes imposed under the newly-enacted Tax Reform for Acceleration and Inclusion (TRAIN) law may start hitting the stores in the middle of January in the case of soft drinks, which now carry a new tax on sugar-sweetened beverages.
Mr. Lopez said the department is gathering information from soft drink companies, with DTI estimating that inventories held by stores are replenished every two weeks.
Pending replenishment, old- stock soft drinks will be taxed at the old rate, which means stores cannot yet pass on the added cost to consumers.
Mr. Lopez said that the DTI will penalize manufacturers or retailers who move early on price hikes, under the antiprofiteering act.
Mr. Lopez also expects a lag of about two or three weeks in the case of fuel prices, with the new tax regime applied on importation of finished product or the refining of crude.
“The [fuel price] increase yesterday [was] due to the usual ups and downs of world oil prices which petroleum companies announce from time to time. That’s why the increase was less than P20 centavos rather than the additional P2.50 excise tax,” he added.
Monitoring of fuel prices is the responsibility of the Department of Energy, but Mr. Lopez said that DTI is open to collaborate in the area of hearing consumer complaints. —