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House panel tackles scrapping of fuel tax hike
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House panel tackles scrapping of fuel tax hike

MANILA, Philippines, December 6 ------ Lawmakers yesterday began tackling measures scrapping taxes on oil products or at least suspending some of them, with opposition Rep. Edcel Lagman warning of street riots similar to those ignited in Paris by rising fuel taxes. “We should not wait for a similar French experience. The French government was forced to suspend its fuel tax hikes because of violent riots. We should be able to avert that situation,” Lagman said.

The House ways and means committee, chaired by Nueva Ecija Rep. Estrellita Suansing, started yesterday deliberations on seven measures aimed at scrapping or suspending fuel excise tax increases under the Tax Reform for Acceleration and Inclusion (TRAIN) law. He said the House and the Senate should pass a joint resolution forgoing next year’s increase in taxes on diesel, cooking gas, gasoline, kerosene and other oil products. Lagman said that while inflation had eased to six percent last month, the rate was still the highest among countries belonging to the Association of Southeast Asian Nations (ASEAN). “The closest to us is Vietnam, where inflation is 4.5 percent. The rest of ASEAN is below two percent,” he added.

On Tuesday evening, President Duterte and his Cabinet agreed to push through with next year’s increase despite a previous decision to forgo it. The panel created a technical working group (TWG) to consolidate the measures. Lagman said the referral to a TWG “is an indication of the committee’s inclination to endorse the proposal to suspend next year’s fuel tax increase.” “A TWG is created usually when there is consensus to recommend the course of action the pending bills are seeking,” he said.

The Albay congressman and his opposition colleagues authored a joint resolution suspending the 2019 adjustment. Marikina Rep. Romero Quimbo and members of his Liberal Party bloc are the authors of a bill scrapping levies on diesel and kerosene. Answering questions from Quimbo, Finance Assistant Secretary Ma. Teresa Habitan said the Bureau of Internal Revenue and the Bureau of Customs have reported collections of nearly P70 billion in fuel taxes from January to October this year.

Of that amount, she said P37.2 billion, or more than half, represented increases imposed under the controversial TRAIN law. She said the Department of Finance is confident of attaining its P53.7-billion revenue target this year from TRAIN. She added that suspending next year’s increase would mean a P40-billion revenue loss. Habitan also said out of this year’s P37.2-billion collections from TRAIN taxes, P18.3 billion came from gasoline, P10.7 billion from diesel and P258 million from kerosene. Based on the DOF data, Quimbo remarked that the government could afford to suspend levies on diesel and kerosene since these two oil products account for a small part of incremental revenues.

Rep. Tom Villarin of Akbayan said the decision of the President and his Cabinet to push through with the 2019 fuel tax increase would “trigger an inflationary push.” “It is clear that inflation was caused by these excise taxes, not because of increases in pump prices of oil,” he said. Bayan Muna Rep. Carlos Zarate said the decision “will definitely jack up prices anew because the excise tax on diesel and bunker fuel will jump to P4.50 liter from P2.50, while gasoline will have a P9 per liter tax or a P2 increase.” “The Duterte administration, instead of heeding the strong clamor of our people to abolish the regressive taxes brought by TRAIN, is again gambling with the prices of goods with the continued implementation of the TRAIN law, and this would definitely hit our consumers hard,” he said.