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House panel approves bill suspending oil excise tax collection

Xave Gregorio - Philstar.com
House panel approves bill suspending oil excise tax collection
File photo shows a gas pump
Geremy S. Pintolo, file

MANILA, Philippines — The House ways and means panel passed Thursday a bill that, once enacted into law, would immediately suspend the collection of excise taxes on some fuel products for six months, or until rallying global oil prices ease.

Under the substitute bill, no excise taxes will be imposed on diesel, kerosene and liquified petroleum gas (LPG) for six months or until the Mean of Platts Singapore, a pricing basis for refined oil products in Southeast Asia, declines to $65 per barrel for four straight weeks.

During that six-month period, excise tax on low-octane gasoline will be reduced to P4.35 per liter. The levies will only return to their original rates once the suspension is lifted.

High-octane gasoline, which is currently subject to a P10-per-liter excise tax, will not be covered by the suspension and tax rate reduction.

“It’s immediate relief for Filipino families, especially affected sectors,” House ways and means committee chairperson Rep. Joey Salceda (Albay) said.

“The premise of this tax relief bill is that the situation is not normal. If inflation weren’t so high, we would be discussing other matters. But now consumers are hurting. Inflation is high. Incomes are depressed. So immediate relief is obviously necessary,” Salceda added.

House lawmakers met last Monday to tackle proposals to address stubbornly high oil prices that’s fanning inflation, which could derail the Philippines’ delicate recovery from the pandemic. Some suggestions include suspending excise taxes on petroleum products, which Finance department officials had flagged as it could sap state revenues at a time the cash-strapped government is battling a health crisis.

Based on Salceda’s estimate, the bill would cost the government around P45 billion. But he argued that “what the government loses, the consumer gains.”

Rep. Carlos Zarate (Bayan Muna party-list) hailed the passage of the measure at the committee level as a “partial victory,” insisting on the repeal of “anti-people” provisions in the Tax Reform Acceleration and Inclusion (TRAIN) law which imposed the excise taxes on fuel in the first place.

“The approval of this urgent bill is a step in the right direction and reflects the true and dire situation of our people on the ground, who are still coping with the pandemic-aggravated crisis,” Zarate said.

Meanwhile, also included in the bill is a “social impact stabilization fund” which will be used for cash aid to affected sectors whenever fuel prices go up. This will be funded by a P2-per -liter charge on gasoline and diesel whenever global oil prices reach lower than $45 per barrel.

Salceda said the House hopes to send the measure to the Senate by the third or fourth week of November. Zarate, meanwhile, urged Malacañang to certify the measure as urgent to speed up its enactment.

FUEL PRICE

HOUSE OF REPRESENTATIVES

OIL

PHILIPPINE ECONOMY

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