Villanueva files bill to fix TRAIN’s fuel excise tax hikes
Sen. Joel Villanueva. FILE PHOTO
Senator Joel Villanueva has filed a bill seeking to fix the conditions on fuel excise tax increase under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
As mandated by the TRAIN law, fuel excise taxes increased by P2.5 per liter this year, and the levy is scheduled to rise by P2 and P1.5 per liter in 2019 and 2020, respectively, for a total P6 excise tax hike for three years.
Filing Senate Bill No. 2014, Villanueva called for the return of excise tax rates to their pre-TRAIN rates if all the following three conditions are present for a period of three consecutive months within any period prior to January 1, 2021:
-Inflation exceeds government target
-Average price of food increases beyond 7%
-Crude oil price exceeds P4,080 per barrel
Villanueva said the bill is crafted to fix the TRAIN law and “to make it more sensitive to the most vulnerable.”
“It is currently self-defeating if we are creating unnecessary burden to the very same people that we wish to help in the first place,” Villanueva said in a statement on Thursday.
The senator said that the three conditions take into account the economic situation faced by ordinary Filipinos on a daily basis.
According to Villanueva, the inflation condition intends to help reduce aggravating effects of fuel tax if inflation exceeds government outlook.
Meanwhile, adding a condition relating to food prices will help minimize the impact of fuel taxes on the welfare of the Filipinos, Villanueva said.
In addition to food price, the bill also introduces a condition to reverse the excise if the price of crude oil in the world market reaches P4,080 per barrel.
Under the TRAIN law, future increases on oil excise taxes will be suspended if the crude oil price in the world market exceeds USD 80 per barrel.
Villanueva said the bill converts the trigger price to the local currency “to take into account further peso depreciation in the future, which could compound the rising price of oil in the world market.”
President Rodrigo Duterte earlier approved the recommendation of his economic managers to suspend the next tranche of oil excise taxes after inflation clocked in at 6.7 percent in September, a new nine-year high. /jpv
READ: Diokno: Duterte approves temporary suspension of oil excise tax increase
