Calls to suspend Round 2 of tax on fuel snowballs

The Philippine Chamber of Com- merce and Industry (PCCI) has urged government to suspend the implementation of the second

tranche of excise tax on fuel so as not to aggravate the already steep increases in prices of basic commodities.

PCCI President Alegria "Bing" Limjoco said this will be their main focus in the forthcoming 44th Philippine Business Conference.

Limjoco noted that Finance Undersecretary Karl Chua prefers giving subsidies to affected Filipinos than suspend its implementation.

She expressed hope that the DOF will hear their arguments during the conference slated on October 18-19 at the Manila Hotel.

PCCI is one with the Employers’ Confederation of the Philippines (ECOP) in their position to suspend the second tranche of the excise tax on fuel.

“I think giving out subsidy to those in need would be difficult, but we will still discuss it at the PBC. We will still push for it to be suspended during the PBC,” said Limjoco.

The TRAIN law this year added 12.65 excise tax per liter to the pump price of gasoline plus 10.32 per liter as value-added tax for a total of 12.97 per liter.

For diesel, 12.50 was added as excise tax per liter plus 10.30 as value-added tax (VAT) for a total of 12.80 per liter.

Diesel used to be free of VAT and excise tax.

Aside from the two commonly used products, TRAIN also imposed excise and valueadded taxes on aviation fuel, kerosene, fuel oil, liquefied petroleum gas (LPG) and auto LPG.

The second tranche of TRAIN is set to add 12.24 per liter to the price of gasoline and 12.24 per liter for diesel as excise and value-added taxes.

The law provides that the excise tax on fuel can be suspended should prices of fuel reach $80 per barrel. The law also provides for the distribution of fuel vouchers to drivers of public utility vehicles to soften the impact of higher petroleum prices. The fuel voucher is a direct subsidy.

Prices of oil have been soaring for weeks triggering adjustments in fares, and prices of basic necessities and prime goods resulting in a 9-year high inflation level at 6.4 percent in August.

Clear guidelines needed At the Senate, Senator Joseph Victor Ejercito renewed his call to economic managers to consider suspending the next round of excise tax increases scheduled in January 2019 to cushion the impact on consumers.

“I urge our economic managers to consider postponing the next round of increases in excise taxes this January 2019,” Ejercito said in a text message to reporters.

“With crude oil at $83 per barrel and a 6.4 percent inflation rate, we need to soften the impact on our people,” he said.

“TRAIN allows suspension of hikes if it reaches $80 for 3 months,” Ejercito stressed.

The benchmark Brent reached a high of $83.32 – the highest level in almost four years amid supply concerns before US sanctions against Iran come into force next month.

This compelled oil companies to raise gasoline prices Tuesday by 11 per liter for the eighth consecutive week and diesel by 11.35 per liter and kerosene by 11.10 per liter for the sixth week.

Sen. Paolo Aquino IV, echoed Ejercito’s call.

In a privilege speech Wednesday, Aquino said DOF should come up with a process that would properly implement the safeguard to help ease the burden of Filipinos due to high prices of food and other goods.

”Let’s call on the DOF to issue clear and actionable guidelines, timelines, rules and regulations on how the suspension can possibly work,” Aquino said.

“The first round of the excise tax on oil under the TRAIN law has already burdened the poor. If the second round this January pushes through, it will knock us down,” he warned.

Barbers’ bill At the Lower House, Surigao del Norte (2nd district) Rep. Robert Ace Barbers, chairman of the House Dangerous Drugs Committee filed a bill repealing Section 43 of the TRAIN law which covers hefty excise taxes on pump fuel totaling 16 per liter from 2018 to 2020.

Barbers' House Bill (HB) No. 8369 states that excise taxes on fuel under the TRAIN Law will automatically revert to the old National Internal Revenue Code (NIRC) rates of excise tax on fuel.

“Prices of fuel have increased significantly and will be much higher on the next tranche of implementation of TRAIN in 2019 and 2020. The increase on fuel prices affects the prices of basic goods and services as producers or manufacturers may pass production costs to consumers,” said the Mindanao solon.

“Our poor countrymen have long been suffering. Our workers whose salaries aren't subjected to minimum tax don't receive additional income for their families. But they feel the brunt of skyrocketing prices of basic goods, which is caused by fuel price hikes,” Barbers noted.

“While RA 10963 is laudable, it should also be adaptable to change, especially now that prices of commodities have gone high. And as legislators, it is our duty to hear the cry of the poor. At pag sinabi ng mahihirap na mas lalo silang naghihirap, maniwala po tayo sa kanila (If the poor say that they are getting poorer, we should believe them),” he added.