THE national government stands to lose P131.4 billion next year if fuel excise taxes are suspended in response to rising oil prices, according to the Department of Finance (DOF).
In a memorandum to Finance Secretary Carlos G. Dominguez, DOF Revenue Operations Group Undersecretary Antonette C. Tionko said the only way to suspend the fuel excise taxes under the TRAIN law is through legislation.
Tionko added that the “substantial revenue loss” could affect the government’s Covid-19 recovery measures for next year.
“Any suspension of the imposition of excise taxes should be appropriately studied as the revenue to be foregone is substantial and may affect the government’s budget for Covid-19 recovery measures,” Tionko said.
Based on the estimates, Tionko said the bulk of the total foregone revenues if excise taxes are suspended will comprise incremental excise revenues under the TRAIN Law which amounts to P106.7 billion. The remaining P24.7 billion will be derived from baseline excise revenues.
On Wednesday, Energy Secretary Alfonso Cusi expressed hope that lower price adjustments in fuel prices would be possible in the next two months after increasing for the eight consecutive weeks.
Since oil firms adjusted gasoline prices last August 31, this has gone up to P7.20 per liter while diesel shot up by P8.65 per liter. Kerosene also increased by P8.05 per liter for the past eight weeks.
If excise taxes in petrol products are suspended, Cusi said, motorists could save P8 to P10 in fuel prices.
Ibon Foundation said in a statement that because of the excise taxes under the TRAIN Law, a jeepney-route driver now pays P181.50 more for 11 liters of daily diesel, or about P5,445 more every month.
Further, Ibon said farmers pay an average of P3,135 more for 190 liters of diesel per hectare per cropping season.
“Oil prices including on sensitive products would be much lower without the oil excise taxes of the Duterte administration’s TRAIN Law which adds P6.72 to the price of diesel and P6.33 to the price of gasoline,” Ibon said.
Last month, (BOC) seized 6,357 liters of unmarked diesel at one of the retail gas stations of a petroleum company in Pampanga as part of its efforts to curb oil smuggling in the country.
The Bureau of Customs Port of Clark issued a Warrant of Seizure and Detention against the operators of Petromobil Corporation’s gas station in Arayat, Pampanga, after a field testing operation was done by the BOC and the Bureau of Internal Revenue last September 3.
The follow-up field testing operations resulted in BOC ordering the closure of another Petromobil retail station in Angeles City in Pampanga, while other stations of the oil company in Rizal and Bulacan were also found with deficient fuel marker levels of 20 percent and below.
The BOC has also teamed up with the Philippine Ports Authority, Maritime Industry Authority, and the Philippine Coast Guard to mobilize a Department of Energy (DOE)-led task force against petroleum smuggling done within the country’s territorial waters.
The DOE-led Inter-Agency Task Force on Energy (IATFE) intends to include the Philippine Navy and the National Intelligence Coordinating Agency in the group so that it would become the “umbrella” organization fighting petroleum smuggling, Guerrero said.
Other options
Also on Thursday, Sen. Panfilo Lacson, citing the TRAIN Law, affirmed that the Duterte administration is not without options to mitigate the impact on continued oil price hikes.
“The TRAIN Law that we passed a few years ago provides that the Department of Finance [DOF] may suspend the implementation of the increase of the excise tax on fuel upon the recommendation of the Development Budget Coordination Committee [DBCC] under certain conditions,” Lacson said in a statement Thursday.
The senator suggested the Executive officials concerned should not readily give up.
“I therefore urge the DOF Secretary to exercise that option under the law, given the unabated increase of the prices of fuel resulting in a heavy burden on the transport sector and the public in general,” Lacson added. With Butch Fernandez