MANILA, Philippines — The inter-agency Development Budget Coordination Committee (DBCC) has trimmed the national government’s 2019 revenue program to P3.159 trillion due to the proposed suspension of the next increase in fuel excise taxes, the Department of Finance (DOF) said yesterday.
In a presentation before the Senate Committee on Finance, Finance Secretary Carlos Dominguez said the DBCC in its recent meeting decided to reduce the government’s revenue program next year by 1.53 percent from the previous target of P3.208 trillion.
Dominguez said the adjustment was caused mainly by the expected revenue foregone due to the proposed suspension of the scheduled excise tax increase on fuel next year, as well as delays in the implementation of the e-receipt program.
“For 2019, the revenue target was also lowered by P40 billion due to the possible suspension of the oil excise tax increase, and by P8 billion more still due to the e-receipts program,” Dominguez said.
The finance chief, however, assured the committee that the government may still recover P14 billion of the projected revenue loss due to increased value-added tax (VAT) collections as a result of higher oil prices.
Hence, Dominguez said the impact of the oil excise tax suspension would likely result in an estimated net loss of P27 billion.
He also said the DOF is working with the DBCC to ensure that the revenue loss would not negatively affect the administration’s Build Build Build program.
The government’s economic team earlier recommended to defer the implementation of the next increase in fuel excise tax in January 2019, as provided under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, to anchor inflationary expectations amid rising global oil prices.
Dominguez said the recommendation is awaiting approval from President Duterte.
“We have not received an official response to it, but I believe the President will approve it,” he said, adding that the suspension would become effective on Jan. 1, 2019, giving Malacañang ample time to deliberate on the DBCC’s recommendation.
Meanwhile, Dominguez is pushing for a three-month rolling average as a condition or trigger for the resumption of the fuel excise hike. This means the suspension would be lifted if Dubai crude oil prices average below $80 per barrel during any three-month period after suspension.
“We will check if at any point in time, the rolling average of three months will be lower, then we will review it at that time,” Dominguez said.
But Finance Undersecretary Karl Kendrick Chua said the conditions for the lifting of the suspension are still being deliberated by the DBCC. These will be included in the implementing rules and regulations they are drafting.