House to tackle fuel excise taxes

RISING COST OF FUEL Activists stage a protest near a gasoline station along Timog Avenue, Quezon City, to call on the government to suspend the excise tax on fuel. —GRIG C. MONTEGRANDE

MANILA, Philippines — With the government’s P5.024-trillion budget now under Senate deliberation, the House of Representatives will focus on various proposals on excise on fuel when it resumes session on Monday, Speaker Lord Allan Velasco said.

“[The House] 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 toward our recuperation,” he said.

Several lawmakers have called for the suspension of the excise on fuel products following the consecutive oil price hikes in the country.

“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,” he added.

Rising global oil prices

The increases in fuel prices have been attributed to global oil prices and Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (Train) law, which came into effect in 2018.

The Train law increased excise on gasoline, diesel and kerosene by various rates over three tranches from 2018 to 2020.

Lawmakers have since blamed the increased excise, in combination with global oil prices, for the 10 consecutive weeks of increases in the pump prices of gasoline.

Over 10 weeks, latest data from the Department of Energy show that gasoline prices have increased by P20.80 per liter while diesel rose by P18.45 per liter and kerosene by P16.04 per liter as of Oct. 26.

Gov’t to lose P131B

But the Department of Finance has warned that the government would lose around P131.4 billion in revenues in 2022 if Congress suspends fuel excise.

“Any suspension of the imposition of excise should be appropriately studied as the revenue to be foregone is substantial and may affect the government’s budget for COVID-19 recovery measures,” Finance Undersecretary Antonette Tionko said in a memorandum to Finance Secretary Carlos Dominguez III.

Expired net provision

The Train law provided the option of suspending fuel excise, but Tionko said that safety net provision expired in 2020 and lawmakers had since proposed that it be renewed.

The Speaker said the House cannot tackle such proposals after it passed the 2022 general appropriations bill on third and final reading on Sept. 30. It was transmitted to the Senate on Oct. 25.

Senate President Vicente Sotto III earlier said the upper chamber would begin deliberations when Congress resumes session this week and pass the budget by the first week of December.