Senate bill to suspend excise tax on pushed fuel
In an earlier initiative calling on the Duterte government to automatically suspend gasoline and diesel excise tax collection anchored on MOPS as a trigger point, is being revived in the Senate.
By filing the enabling legislation, Senator Grace Poe aims to amend Section 148 of the National Internal Revenue Code for this purpose. It estimates that the suspension of the excise tax will immediately reduce P10 in the price of petrol per liter and P6 in the price of diesel.
The previous initiative proposes to suspend the tax whenever the average price of Dubai crude oil based on average Singapore Platts (MOPS) exceeds $80 per barrel over a 3-month period.
Poe cited a report by the Philippine Statistics Authority that said inflation rose in all 17 regions, with some areas outside the National Capital Region higher due to high transportation costs.
Furthermore, the senator noted that the transport sector accounted for 31.7% of the rise in inflation last June, with inflation for diesel already at 92.5% and for gasoline at 53.9%. .
Poe points out in a statement that “removing the P6 from the diesel price per liter during critical times can help our drivers get back on the road”, adding that “it will reduce the cost of transporting goods”.
Additionally, she cites estimates showing that 20% of the 900,000 jeepney drivers “left the business due to losses from high pump prices”.
Still, Poe made a positive note that “the cogs of the economy can move faster if public transport is able to move people to work or buy essential goods and commodities they can. afford”.
In turn, Senator Panfilo Lacson was quick to assert his support for Poe’s proposal, observing that the government “for so long has granted over 100 lines of Value Added Tax (VAT) exemptions.”
This, as Lacson laments, the Duterte government could have gained at least 117 billion pesos in additional tax revenue in 2018 alone, even with a value-added tax (VAT) rate reduced from 12% to 10%. This, according to the solon, could have been done by removing 78 exemption lines from certain sectors such as electricity, cooperatives, housing and economic zones.
At the same time, Lacson raised concerns when economic officials in the Marcos administration said the government stood to lose more than 100 billion pesos in revenue from the said excise tax suspension.
Yet Poe pointed out that while the government can afford to lose 251 billion pesos to big business under the Business Recovery and Business Tax Incentives (Create) Act in the first two years, “Why can’t he do the same for our public service?” drivers, delivery people and ordinary workers who bear the brunt of higher transport costs? »
Picture credits: Roy Domingo