Tax increase for oil is counter-productive

BAYAN Muna Rep. Carlos Isagani Zarate yesterday said that tax increase for oil products would be counter-productive and would wipe out or at the minimum drastically reduce the benefits of lower income taxes.

“This proposal is antipeople and would definitely have an adverse effect on consumers. Higher taxes for oil would create a domino effect that would spike the prices of basic goods and services like water and electricity. Just imagine, how much a P10 increase in gasoline and P6 increase in diesel would affect the price of rice, fish and meat? Masyado itong magiging mabigat sa mamamayan,” Zarate said.

“We hope that Department of Finance’s (DOF) Sec. Carlos G. Dominguez III would reconsider this proposal and look

for other non-tax means that would hit the poor hard. We can look at the national budget for other items that could defray the lost tax revenue from lowering income taxes, an example of which is the Risk Management Fund at P30 billion, the Comprehensive Automotive Resurgence Strategy at $600 million or P28.2 billion as well the Industry Competitive Fund at P5 billion,” the progressive lawmaker added.

Based on DOF proposed comprehensive tax reform package earlier turned over to Dominguez by former Finance Sec. Cesar V. Purisima, an excise tax increase on gas, diesel and other oil products would bring an estimated revenue gain of P178 billion in the first year of implementation.

The DOF’s proposal was to hike during the first year to P10 per liter the levy on regular gasoline and other products that are presently imposed positive excise tax rates, such as aviation turbo jet fuel, lubricating greases and oils, leaded and unleaded premium gasoline, naphtha, as well as petrolatum and waxes.