Duterte OKs implementation of 2nd tranche of oil excise tax by January
President Rodrigo Duterte has approved the recommendation of the Development Budget Coordination Committee (DBCC) to implement the second tranche of excise tax on petroleum products next year, officials said on Tuesday.
With this, the government would no longer lose an estimated P43.4 billion revenue.
"Due consideration was given to several factors including, but not limited to: the downward impact on inflation owing to the steep drop in the Dubai crude oil price, the disruption in the BBB (Build, build, build) infrastructure program, and reduction in budgets including personal services of national government agencies should excise tax on fuel be suspended," said Presidential Spokesperson Salvador Panelo in a statement.
In a text message to reporters, Budget Secretary Benjamin Diokno noted the "sharp turnaround in world crude prices" from a peak of close to $80 per barrel to $68 per barrel on November 29.
He said Dubai oil future prices are projected to further decline below $60 per barrel in 2019.
For diesel prices, Diokno said at its peak, the price was P49.80 per liter and it is seen to be P37.76 in January next year, inclusive of the P2 peso excise tax.
"For gasoline (95 octane) it was P60.90 at its peak, it will be 50.82 in Jan (20)19 inclusive of P2 additional excise tax," he said.
Diokno also said the condition for suspension of additional P2-excise tax on fuel does not exist.
He added that if the deferment would proceed, there would be "huge revenue loss estimated at P43.4 billion."
Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, suspension of excise taxes is provided for only when the global price of oil averages $80 per barrel or higher for three consecutive months, Panelo said.
Panelo said the government would continue to provide assistance to some sectors.
"While the oil excise tax increase is a negligible contributor to inflation, we still commit to provide financial assistance to the 50 percent poorest households," he said. Celerina Monte/DMS