Lawmaker proposes six-month reduction in fuel excise tax

RISING OIL PRICES Progressive and militant activists stage a protest at a gasoline station along Timog Avenue, Quezon City, to call on the government to suspend the oil excise tax. — GRIG C. MONTEGRANDE

MANILA, Philippines — Albay Rep. Joey Salceda has proposed a reduction in fuel excise for six months as the “most fiscally sustainable” proposal amid spiraling oil prices.

House Bill No. 10438 seeks to amend the fuel excise provision of the National Internal Revenue Code and reduce excise taxes on fuel in response to rising costs.

Salceda, chair of the House ways and means panel, filed the measure on Tuesday.

His measure proposed that diesel and kerosene be exempted from excise from Dec. 1, 2021 to June 1, 2022. Excise taxes on gasoline will be reduced from P10 to P7 per liter during the same period.

In a statement, Salceda warned that recent fuel price hikes “could be a serious dampener to economic recovery and price stabilization.”

He pointed out that the price of crude oil per barrel has already breached the $84 mark. The benchmark under the Tax Reform for Acceleration and Inclusion law was at $80 per barrel.

“The $80 mark was an ‘alert level.’ We are past that level. The Mean of Platts Singapore Price for crude is now over $84. We should really take up a reduction in the excise taxes,” he said.

He explained that diesel is the “poor man’s transport fuel” most used by tricycles, motorcycle delivery riders, farmers and jeepney drivers, while kerosene is the “poor man’s cooking fuel.”

“I believe that the biggest reduction should be on these commodities. Gasoline, on the other hand, is the fuel of use for cars and sports utility vehicles. While we should reduce gasoline excise taxes, the distributional impacts will really be much better in diesel. It is much more progressive that way,” Salceda said.

He added that his proposal 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 fuel excise is upwards of P130 billion … I think my proposal involves a fiscal cost we can recover,” Salceda said. INQ