Senate bill to suspend fuel excise tax pushed
AN earlier initiative asking the Duterte government to automatically suspend collection of excise tax on gas and diesel anchored on the MOPS as trigger point is being revived in the Senate.
In filing the enabling legislation, Sen. Grace Poe aims to amend section 148 of the National Internal Revenue Code for the purpose. She estimates that the suspension of the excise tax will immediately slash P10 from the price of gasoline per liter and P6 from the price of diesel.
The earlier initiative proposes to suspend the tax whenever the average Dubai crude oil price based on the Mean of Platts Singapore (MOPS) exceeds $80 per barrel over a 3-month period.
Poe cited a Philippine Statistics Authority report that inflation has risen in all 17 regions, with some areas outside the National Capital Region having higher due to elevated transport costs.
Moreover, the senator noted that the transport sector accounted for 31.7 percent in the rise in inflation last June, with inflation for diesel already at 92.5 percent and for gasoline at 53.9 percent.
Poe points out in a statement that “taking off P6 from the price of diesel per liter during critical times can help our drivers ply their routes again,” adding that “it will lower the cost of transporting goods.”
In addition, she cites estimates showing that 20 percent of the 900,000 jeepney drivers “have left the trade due to losses from high pump prices.”
Still, Poe struck a positive note that “the wheels of the economy can go faster if public transport is able to move people to work or buy goods and essentials that they can afford.”
In turn, Senator Panfilo Lacson promptly affirmed he was backing Poe’s proposal, observing that the government “for so long has afforded over 100 lines of valueadded tax (VAT) exemptions.”
This, as Lacson laments the Duterte government could have earned at least P117 billion in additional tax revenues in 2018 alone, even with a reduced valueadded tax (VAT) rate from 12 percent to 10 percent. This, according to the solon, could have been done by removing 78 lines of exemption from some sectors such as power, cooperatives, housing and economic zones.
At the same time, Lacson aired concerns when the economic managers of the Marcos administration said the government stands to lose over P100 billion in revenues from the said excise tax suspension.
Still, Poe emphasized that if the government can afford to lose P251 billion to benefit big companies under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act in the first two years, “why can’t it do the same for our public utility drivers, delivery riders and ordinary workers who bear the brunt of higher transport costs?”