Fuel excise tax reduction for six months pushed

FILE PHOTO

MANILA, Philippines — House committee on ways and means chair Joey Salceda is recommending a reduction of fuel excise taxes on diesel, kerosene, and gasoline for six months.

Under House Bill No. 10438, Salceda proposes exempting diesel and kerosene from excise taxes from December 1, 2021, to June 1, 2022, while gasoline excise taxes will be reduced from P10 per liter to P7.

“Diesel is the poor man’s transport fuel. Tricycles, motorcycle delivery riders, farmers, and jeepney drivers use diesel for their vehicles. Kerosene is the poor man’s cooking fuel. I believe that the biggest reduction should be on these commodities,” Salceda said.

“Gasoline, on the other hand, is the vehicle of use for cars and SUVs. While we should reduce gasoline excise taxes, the distributional impacts will really be much better in diesel. It is much more progressive that way,” he added.

Several sectors have called for the suspension of all fuel tax collections to mitigate the impact of rising oil prices.

The DOF has expressed its disapproval of the proposed full suspension of fuel excise taxes, saying the national government will stand to lose P131.4 billion next year should the proposal be implemented.

Salceda said his proposal of simply reducing the excise tax is the “most fiscally sustainable” among all current proposals.

“My proposal aims to provide relief without binding the state’s fiscal resources into an unsustainable commitment. The [Department of Finance’s] full-year estimate of a total suspension of the fuel excise tax is upwards of P130 billion,” Salceda said.

“I think my proposal involves a fiscal cost we can recover,” he added.

Salceda is also pushing to give the Department of Energy (DOE) the motu propio power to investigate sellers for unusual price activity,”

“The ultimate goal is that the reduction goes towards the consumer,” Salceda said.