SENATOR Grace Poe has filed Senate Bill 2445 that seeks to suspend the collection of excise taxes on gasoline and diesel if the average price of Dubai crude oil hits $80 per barrel for three consecutive months.
The suspension of the excise tax will immediately bring down the cost by P10 per liter for gasoline and P6 per liter for diesel.
“The rising cost of fuel is certain to have a spillover effect on the cost of other products, especially food which accounts for a big chunk of a household’s expenses. Such will aggravate poverty and hunger among our people. If government cannot substantially provide for its people, then at the very least, it must do all it can to ease their burden,” Poe stressed.
The Philippine Statistics Authority reported last week that food inflation dropped in October to 5.3 percent but fuel inflation rocketed to 32.9 percent from September’s 21.3 percent and was among the highest reported this year.
Poe’s bill proposes to amend section 148 of the National Internal Revenue Code by allowing the suspension of excise taxes on regular gasoline, unleaded premium gasoline, and diesel.
The Tax Reform for Acceleration and Inclusion (TRAIN) law allowed for the suspension of the scheduled increase in the excise tax on fuel when the three-month average Dubai crude oil prices based on the Mean of Platts Singapore hits $80 per barrel or more. The suspension, however, is only for the years 2018 to 2020. The TRAIN law also requires the Department of Finance (DOF) to conduct an annual review of the implementation of the excise tax on fuel based on projections and recommendations of the Development Budget and Coordination Committee but it also requires that the suspension should not result in any reduction of the excise tax being imposed at the time.
The DOF had said government stands to lose P131 billion from the suspension of the excise tax on gasoline and diesel, P24.7 billion of which represents its projected foregone revenue from the tax and P106.7 billion in incremental revenues.
