Fuel excise tax rollback needs Congress

Suspending fuel excise tax rates that took effect this year would need action from Congress, the Finance department said Tuesday after some senators urged President Duterte to lift them and soften the effects of rising prices.

Finance Assistant Secretary Tony Lambino said the Tax Reform for Acceleration and Inclusion (TRAIN) law does not have a provision to roll back the excise tax on oil products.

"There is no provision on the rollback of the current excise tax (on oil) that was implemented this year. So, that will need a congressional action," Lambino said in a press briefing in Malacañang.

TRAIN, the first package of the government's tax reform program, imposes new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products. The excise taxes on oil products would be gradually increased from 2018 to 2020.

The next round of oil excise tax hike was supposed to take effect next January 1. The law allows the temporary suspension of the increases if the average price of Dubai crude based on Mean of Platts Singapore reaches or exceeds $80 per barrel for three consecutive months.

TRAIN, like all laws, went through deliberations and voting at both houses of Congress.

While the condition provided by the law has not been met, Duterte agreed this week to suspend the second round of increase to anchor inflation expectations and counter profiteering and hoarding.

Economic managers have said crude prices are likely to stay above the $80 threshold over the next two months.

But some senators believe the suspension should cover not just the next round of increase but any further hikes in excise taxes on fuel. In a letter sent to the president last week, 17 senators from the majority bloc said the suspension of oil excise tax increases would lift the "heavy burden" carried by Filipinos affected by high commodity prices.