‘Suspend oil taxes under TRAIN to arrest inflation’

Congressmen belonging to the opposition Liberal Party (LP) and leftist Makabayan bloc are calling on Congress to suspend new and higher oil taxes imposed under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Their collective call is contained in Joint Resolution No. 27, which they filed yesterday.

The authors are the opposition group of Edcel Lagman of Albay, LP led by Romero Quimbo of Marikina and Carlos Zarate of Bayan Muna and other Makabayan members.

They made the plea in the wake of the 6.4 percent inflation for last month reported by the Philippine Statistics Authority.

Lagman and his colleagues said the new and higher fuel taxes under TRAIN were the “main culprit” for rising inflation or increases in the prices of goods and services.

These and further adjustments the law authorizes for next year and 2020 should be suspended until consumer prices go down, they said.

TRAIN levied new taxes on diesel, kerosene, cooking gas and bunker fuel for electricity generation, while previous levies on other oil products like gasoline and on coal, also used to produce electricity, were increased.

The law also imposed new taxes on sugar-sweetened beverages and tobacco.

In the case of diesel, the tax imposed this year was P2.50 per liter, plus 12 percent value added tax (VAT).

The levy will go up to P7 per liter in 2020 for diesel, kerosene, cooking gas and bunker fuel for electricity, and to P10 per liter or kilogram for other oil products.

The administration’s economic managers claim that the effect of TRAIN on inflation is less than one percent.

However, Zarate said such claim is obviously fake news, insofar as fuel and food inflation is concerned.

Since January, he said the price of diesel has increased by P10-P11 per liter due to TRAIN and highest cost of crude in the world market.

He said the tax component, including VAT, is about P2.90, which is almost a third and not less than one percent of the P10-P11 price hike.

Lagman said while August inflation averaged 6.4 percent, the increase in food prices was higher at more than eight percent and hit double digit in some regions.