DOF: PH to lose P147.1-B if excise tax, VAT on fuels suspended
MANILA, Philippines — The Philippines will lose P147.1 billion in one year if the excise tax and value-added tax (VAT) imposed on fuel will be suspended, the Department of Finance (DOF) said Thursday.
During the briefing conducted by the House committee on energy, the DOF stressed its disapproval of the proposed suspension of the excise tax on oil amid the rising prices of fuel.
“The DOF does not support the proposed suspension of the excise taxes on fuel as well as the VAT because it translates to significant foregone revenues. It will be detrimental to our recovery and long-term goals and it is inequitable,” the DOF said.
“Suspending all the fuel excise taxes and the VAT on fuel excise in revenue losses of up to P147.1 billion or around 0.7% of the GDP in 2022,” it added.
The DOF reiterated that the “better and more equitable way” to address the impact of increasing fuel prices is to provide swift and targeted support to the vulnerable sectors.
“With the suspension of fuel excise taxes, you will also lose the improvements we made in making the tax system more equitable,” the DOF said.
The government is set to give away cash grants amounting to P1 billion to at least 178,000 registered drivers of public utility vehicles (PUVs) impacted by the rising prices of fuel.
READ: Aid to PUV drivers amid unstoppable oil price hikes: P1B in cash grants
However, Bayan Muna Rep. Carlos Zarate said the amount is not enough to aid drivers.
“It’s very unfortunate na i-shutdown agad ‘yung problema na ‘yan. The DOF earlier cited na ang preference nila ay magbigay ng ayuda, that’s a welcome move kahit belated,” Zarate said.
“Pero paano ‘yung mahihirap na kababayan na apektado nitong domino effect nang pagtaas ng oil products?” he added.
The DOF earlier reported that suspending collection of excise on oil would cost the government P131.4 billion in foregone revenues in 2022.
