Grace Poe to push for fuel tax suspension in 19th Congress

·Contributor
·3 min read
Senator Grace Poe speaks at a press conference in Manila on May 9, 2016. (Photo: MOHD RASFAN/AFP via Getty Images)
Senator Grace Poe speaks at a press conference in Manila on May 9, 2016. (Photo: MOHD RASFAN/AFP via Getty Images)

Senator Grace Poe is set to push for the refiling of her bill seeking the temporary suspension of the excise tax collection on oil products in the 19th Congress.

The Senate committee on public service chair said on Tuesday that an oil tax reprieve “will provide a crucial lifeline” and could “cushion the impact of soaring prices on vulnerable sectors.”

“The revenues the government will generate from the excise tax to fund cash aid might come too late for families who have nothing to eat now. As the saying points out, ‘Aanhin pa ang damo, kung patay na ang kabayo’ (What is grass good for, if the horse is already dead),” Poe said.

If passed, the senator’s bill will amend the National Internal Revenue Code and will allow the automatic suspension of excise tax on regular gasoline, unleaded premium gasoline and diesel, at the moment when average Dubai crude oil based on Mean of Platts Singapore for three months prior to the scheduled increase for the month reaches or exceeds $80 per barrel.

For months, consumers struggle as the country faces steep oil price hikes and record high inflation in the country.

Currently, the Tax Reform for Acceleration and Inclusion (TRAIN) law places P10 per liter excise tax on unleaded premium gasoline and P6 per liter for diesel, aside from the value-added tax of 12 percent that is also imposed on fuel products.

Also pushing for the suspension measure in Congress is Senator Aquilino Pimentel III, who also vowed to refile a bill in the senate. Pimentel argued that while the Philippine government has no control over world market prices, authorities have power over pricing once fuel products arrive in depots.

Likewise, different groups have called for the suspension of oil taxes. In a statement, the Bagong Alyansang Makabayan (Bayan) group slammed the government over its “inability” to provide social support despite waves of fuel price hikes. Calling for the suspension of fuel taxes, Bayan underscored that the government earns more every price hike due to VAT being collected on a percentage basis.

“It is wrong for the government to have windfall revenues from VAT on oil because the increased revenues come from increased suffering of consumers. The higher the oil prices get, the bigger the VAT collection. It is simply oppressive,” Bayan secretary-general Renato Reyes said.

However, Dr. Renato Reside Jr. of the UP The School of Economics cautioned that the removal of fuel taxes would remove a huge chunk of the country’s tax revenue. In an interview, Dr. Reside highlighted that the government still needs revenues from oil taxes because the country is still in a “fragile economic state.”

Likewise, outgoing Finance Secretary Carlos Dominguez III echoed the sentiments of Dr. Reside and instead proposed a P200 per month grant to qualified households.

Despite the pronouncements, Poe still hopes that the incoming Marcos administration will consider the excise tax suspension.

On Monday, President-elect Ferdinand “Bongbong” Marcos, Jr. said that he prefers to provide “assistance” to sectors affected rather than suspending the tax on oil.

Basti Evangelista is a news and opinion writer who focuses on Philippine national politics and sectoral issues. His personal advocacy includes press freedom and social justice.

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