A LEADER of the House of Representatives said on Tuesday that the lower chamber is studying a tax approach to help Filipinos with the impact of increasing petroleum products, but cautioned that lawmakers should be careful with the proposed excise tax suspension.
Like in the 18th Congress, House Committee on Ways and Means Chairman Joey Sarte Salceda said he proposed to reduce the excise tax by P3 when the average Means of Platts Singapore price exceeds $80 for three months and increase the tax by P2 when the price is below $45.
“As I said in interviews, we have to be careful with the excise tax suspension because, while world oil prices go up and down, fiscal credibility is difficult to restore,” he said.
“The additional revenues during periods of low prices can be used for fuel subsidies when prices are high. The leadership is studying this approach. A highly volatile and socially sensitive commodity should not have such an inflexible tax regime,” he added.
One proposal in Congress grants the President the authority to suspend or reduce the excise tax on fuel.
Under the proposal, the President, on recommendation of the Development Budget Coordination Committee, may suspend or reduce excise taxes on fuel through an executive order provided that the average Dubai crude oil based on the Means of Platts Singapore for three consecutive months reaches or exceeds $80 per barrel. Provided that such suspension or reduction of excise taxes shall be automatically lifted when the above condition is no longer present or after a year.
According to Salceda, the chamber should exhaust all measures before “we touch our taxes, which are the lifeblood of the state.”
“To help the most adversely affected, we need fuel discounts for farmers, fisherfolk, and the transport sector. We have P9 billion in excess VAT revenues to use for this,” he said.
To increase mileage and reduce the pump price, Salceda said the government is allowed by law to reduce the bioethanol requirement of 10 percent to 5 percent in gasoline.
“That will reduce the total price by P3.1 per liter for gasoline,” said Salceda.
Image credits: Nonoy Lacza
