MANILA – Lawmakers at the House of Representatives on Wednesday continued to push for the suspension of fuel taxes to ease the impact of soaring oil prices, even as the government preferred subsidies over excise tax suspension.
Quezon City Rep. Precious Castelo led the filing of House Resolution 2529, which urged President Rodrigo Roa Duterte to intervene in the "fuel crisis" faced by the country
The resolution also urged Duterte to support proposals to temporarily suspend excise taxes on petroleum products to temper the "overwhelming" price increase amid Russia's invasion of Ukraine and the ongoing coronavirus pandemic.
Deputy Speaker Rufus Rodriguez said the suspension of fuel taxes would give Filipino instant relief from soaring prices of gasoline, diesel and other oil products.
Rodriguez has filed a bill to suspend fuel taxes for four years up to 2025.
He said those in the public transportation sector who are beneficiaries of the government’s targeted financial assistance program feel that such help is not enough.
“They are of the view that shelving excise taxes whenever the cost of crude is high would be more meaningful and would have an across-the-board impact on the population,” he said.
He, however, admitted that the tax suspension proposal would mean a revenue loss on the part of the government.
“I can understand where the DOF (Department of Finance) is coming from. But the loss is only temporary since collection will resume once the price of crude oil goes down. Besides, the 12-percent value added tax will still be there, and VAT (value-added tax) revenues will increase due to the higher price of crude,” he said.
He pointed out that the additional VAT income will partly offset the revenue loss from the suspension of excise taxes.
He added that the government could impose mandatory savings to recoup lost revenues.
“It’s obvious that every Filipino, rich or poor, will benefit from it. In fact, I believe that it will have a greater impact on the poor than on the rich,” he said.
According to DOF Undersecretary Paola Alvarez, the government prefers targeted subsidy over the suspension of excise tax on fuel products because the latter has a long-term negative impact on government revenues and the economy.
Alvarez said fuel consumption of those belonging to the higher bracket of society has the bigger share at around 48.8 percent while lower-income households’ share is around 13.8 percent.
Thus, suspension of the excise tax on fuel products will benefit the higher-income households but is detrimental to the government through lower tax collection, which, in turn, will impact the poor since the government will have lesser funding for its social services program, she said. (PNA)