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Phl Tax Reform update so far (Part 2)

“Childbirth, Death and Taxes. There’s never any convenient time for any of them.” – Margaret Mitchell

Last week, we specifically only touched upon the Income Tax aspect of the Phl Tax Reform package that is currently sitting in congress. With the reduction of income taxes, Revenue lossesis estimated to be around Php139.6 billion in the first full year of implementation!

This week, we’ll share the details of the proposed increase in the excise-tax rates on all petroleum products to address negative externalities brought about by congestion and pollution plus the restructuring and increasing the excise tax on automobiles, which affects both businesses and consumers since ‘oil products’ is not limited to just fuel consumption.

Like the income tax changes, the increase in excise tax on oil products will be implemented on a staggered basis as well, also starting July 1 this year, unlike in the original Department of Finance (DoF) proposal, which would have implemented the increase on a one-time basis.

Under the bill, the excise tax on petroleum products will increase every year starting 2017 to 2019 which includes the following:

* Lubricating oils and greases, including, but not limited to, base stock for lube oils and greases, high-vacuum distillates, aromatic extracts, and other similar preparations, and additives for lubricating oils and greases, whether such additives are petroleum-based or not, per liter and kilogram, respectively, of volume capacity or weight, from Php4.50 to Php7 in 2017, Php9 in 2018 and Php10 in 2019;

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* Processed gas, per liter of volume capacity, from Php0.05 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Waxes and petrolatum, per kilogram, from Php3.50 to Php7 in 2017, Php9 (2018) and Php10 (2019);

* On denatured alcohol to be used for motive power, per liter of volume capacity, from Php0.05 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Naphtha, regular gasoline and other similar products of distillation, per liter of volume capacity, from Php4.35 to Php7 in 2017, Php9 in 2018 and Php10 (2019);

* Leaded premium gasoline, per liter of volume capacity, from Php5.35 to Php7 in 2017, Php9 in 2018 and Php10 in 2019; unleaded premium gasoline, per liter of volume capacity, from Php4.35 to Php7 (2017), Php9 (2018) and Php10 (2019);

* Aviation turbo jet fuel, per liter of volume capacity, from Php3.67 to Php7 in 2017, Php9 (2018) and Php10 (2019);

* Kerosene, per liter of volume capacity, from Php0.00 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Diesel fuel oil and similar fuel oils having more or less the same generating power, per liter of volume capacity, from Php0.00 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Liquefied petroleum gas, per liter, from Php0.00 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Asphalts, per kilogram, from Php0.56 to Php3 in 2017, Php5 (2018) and Php6 (2019);

* Bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, from Php0.00 to Php3 in 2017, Php5 (2018) and Php6 (2019).

 

The bill also states that the tax rates shall be increased by 4 percent every year thereafter, beginning January 1, 2020, through revenue regulations issued by the secretary of finance.

End of part2

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The writer is an RFP® - registered financial planner of RFP PH, Licensed Real Estate Broker and Director of CERTA, Inc., a family estate planning and investment advisory firm. To know more about financial planning and training services, please visit www.certa.ph

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