EconomyEditor's PickHouse to tackle fuel tax as it resumes sessions

November 7, 2021
PHILIPPINE STAR/ MICHAEL VARCAS

THE HOUSE of Representatives will tackle measures seeking to either suspend or lower the excise tax on oil when sessions resume on Monday.

“Congress would like to be informed of how fuel prices have shot up so fast in a matter of weeks, so that we can possibly come up with measures that will help mitigate this emerging obstacle towards our recuperation,” Speaker Lord Allan Jay Q. Velasco said in a statement.

The House Ways and Means Committee will begin hearings on the bills proposing to reduce or suspend excise tax on fuel products.

Albay Rep. Jose Ma. Clemente S. Salceda, who heads the committee, filed a bill that seeks to exempt diesel and kerosene from excise tax, and reduce the excise tax on gasoline to P7 per liter (/L) from P10/L from Dec. 1, 2021 to June 1, 2022.

Deputy Speaker and Cagayan de Oro Rep. Rufus B. Rodriguez also filed a bill that would roll back the excise tax on fuel products for the next five years to the rates provided under the National Internal Revenue Code before it was amended. This would lower the excise tax on regular gasoline to P4.35/L and unleaded to P5.35/L, while no excise taxes will be imposed on diesel, kerosene, and liquefied petroleum gas.

“As we prepare for the wider reopening of businesses, we must ensure that our economic recovery will not be hampered by unwelcome disruptions, such as the unimpeded sharp rise in the cost of fuel,” Mr. Velasco said.

Business groups on Friday asked politicians to reconsider their request to suspend oil and electricity taxes, and instead provide targeted relief measures for transport workers such as subsidies and cash transfers.

“For example, on the oil tax, public utility vehicles (PUV) account for only around 30% of total diesel consumption. Therefore, most of the benefits of a blanket suspension would go to people who don’t operate or use PUVs, as well as other oil consumers. These are funds that the government could and should use on public services that would most benefit lower income and vulnerable Filipinos,” according to the statement.

The statement was signed by eight groups, including the Financial Executives Institute of the Philippines, Makati Business Club and Philippine Chamber of Commerce and Industry.

Energy Secretary Alfonso G. Cusi earlier suggested the suspension of excise taxes on oil, as pump prices continued to soar. If implemented, Mr. Cusi said removing excise taxes might reduce pump prices by P8 to P10 per liter.

However, the Department of Finance warned that the suspension of excise tax would force the government to forego as much as P131.4 billion in revenue next year, possibly hindering economic recovery.

Meanwhile, Mr. Velasco said the House would prioritize the ratification of the proposed 2022 national budget as soon as the Senate passes its own version.

Senate leaders earlier said they aim to pass the budget bill by end-November.

“With such assurance from the Senate leadership, we do not see any major stumbling block in having a ratified and enacted 2022 national budget by December,” the Speaker said.

The House passed House Bill 10153 or the General Appropriations Act on third and final reading on Sept. 30. It was transmitted to the Senate on Oct. 25.

Congress adjourns for the Christmas break on Dec. 18. It will hold sessions from Jan. 17-Feb. 4, before adjourning for the national elections. Sessions will resume on May 23, with sine die adjournment on June 4. — Russell Louis C. Ku

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