P6 tax on diesel unlikely in January

MANILA, Philippines - It is unlikely that the P6 tax on diesel, kerosene, cooking gas and bunker fuel for electricity generation could be imposed in January, as the administration is proposing.

House of Representatives Majority Leader Rodolfo Fariñas said yesterday the new target date would be in 2019 since senators did not make a firm commitment to approve the bill on the P6 levy and other so-called tax reforms this year.

“As you very well know, they cater to the whole voting population and are more sensitive to public pressure,” he said.

He said the commitment of Senate leaders during the Senate-House consultation meeting on July 26 was that they would approve the bill by the first quarter of next year.

He added that the need to convene a conference committee to reconcile the two chambers’ version of the measure could further delay final approval.

Other congressmen said the fast-approaching 2019 mid-term elections could prompt the Senate to dilly-dally in passing the bill.

Several senators are believed to be seeking a new term, including Senate President Aquilino Pimentel III.

New and higher taxes could cost their re-election. In 2007, Sen. Ralph Recto lost his re-election bid due to strong backlash from his authorship of the expanded value added tax bill in 2005. He won a fresh term in 2010.

Aside from imposing a P6 tax on diesel, kerosene, cooking gas and bunker fuel, the so-called tax reform bill increases the levies on other oil products, including gasoline, and expands the coverage of the 12-percent value added tax. It also increases taxes on cars.

The measure is not all about new and higher impositions as it proposes to reduce the income tax of millions of salaried taxpayers and professionals.

Based on calculations made by the Department of Finance (DOF), the net impact of the combination of new and higher taxes and lower income tax would be negative on 60 percent of the population.

According to the DOF study, the “subsistence poor, poor, near poor and informal worker” would lose from P1,145 to P2,570 a month, while taxpayers grouped as A and B would lose P96,096 to P255,032.

Taxpayers who would be positively impacted are wage earners, professionals and corporate executives. They would have a gain ranging from P500 to P33,629.

The DOF estimates were based on the 2015 family income and expenditure survey and assumed that a household has two income earners.

Albay Rep. Joey Salceda, who is senior vice chairman of the House committee on appropriations, said the proposed P3.8-trillion 2018 national budget already includes expected revenues from the tax reform bill.

“Some P134 billion in net gain is included – that is total projected revenues of about P260 billion less losses from reduced income tax,” he said.