Aquino calls for mechanism to suspend fuel excise taxes

SENATOR Paolo Benigno A. Aquino IV on Wednesday said he wants a “reasonable mechanism” for suspending fuel excise taxes if inflation breaches certain thresholds, and denied that such a suspension would significantly set back the government’s revenue collection efforts.

In a privilege speech, Mr. Aquino noted that a bill he filed on May 10 seeks to amend Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law. The bill specifies an inflation- related trigger event of three months of inflation exceeding government targets leading to the automatic suspension of excise taxes on fuel, which have been blamed for stoking inflation.

“There are those who are saying that if we suspend the excise taxes, there would be no money for ‘Build, Build, Build,’ free tuition law, and other programs of the government. This is not true. After all, the target collection of excise tax on fuel based on TRAIN (Tax Reform for Acceleration and Inclusion) is only P70 billion,” he said in his speech.

He said the current provision to suspend fuel excise taxes under TRAIN only applies to price increases after January 2019.

TRAIN raised the excise on gasoline and diesel to P7 per liter and P2.50 per liter, respectively. It also contains a suspension provision on the scheduled increase of fuel excise tax if the Dubai light sweet crude benchmark in the three months prior to the scheduled increase averages $80 per barrel or higher.

“What we need is a safeguard, Mr. President, which is responsive to the surges in prices and the needs of our countrymen,” Mr. Aquino said.

The senator also maintained that the government could replace the P70 billion worth of foregone fuel excise taxes from its P319 billion worth of underspending in 2017.

He also called for more efficient tax collection by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

“I’m sure we can find that P70 billion from different government departments and agencies to cover the losses if we will suspend the fuel excise tax,” he said.

While acknowledging the external factors causing inflation, Mr. Aquino maintained that the government could act on other fronts to address rising inflation.

Aside from the suspension of fuel excise taxes under TRAIN, Mr. Aquino also called for the full implementation and an increase in unconditional cash transfers under TRAIN, issued to the poorest families to counter the impact of higher taxes.

The senator also pushed for the passage of the rice tariffication bill, which remains pending in the committee level, to address high rice prices. —