Temporary suspension of fuel tax hike readied

Temporary suspension of fuel tax hike readied
PHOTO FROM THE PHILBIZNEWS

Temporary suspension of fuel tax hike readied

After a tag-of-war whether to suspend the fuel excise tax or not, wherein President Rodrigo Duterte is open to suspending the excise tax, while the Department Of Finance was not so keen about it and even said that suspending the fuel tax has no significant effect in lowering the pump price of gasoline and other petroleum products.

Now, Malacañang has announced that it is open to suspending the scheduled increase in excise taxes on oil even if the proposal could lead to billions of loss revenues.

Special Assistant to the President Christopher Go said the impact of rising prices on the poor would be the government’s primary consideration in deciding whether to put on hold the next round of oil excise taxes hike.

In a statement, Go said, “I heard that a resolution has been filed in the Senate calling for the suspension of excise tax increase due to high inflation. We are open to it but we have to consider what is in the TRAIN (Tax Reform for Acceleration and Inclusion) law.”

“We are balancing everybody’s interest. We are considering the fact that the suspension of the excise tax increase would lead to maybe about P40 billion loss for the government. But despite the situation, the primary consideration of the government is the effects (of higher prices on) our poor countrymen,” he added.

Earlier, Senate Minority Leader Franklin Drilon said Duterte could ask lawmakers to pass a resolution that would allow him to suspend the excise taxes on petroleum products.

Go said the president is monitoring the prices of oil and other commodities to mitigate the effect of inflation, which hit a record-high 6.7 percent last month.

“The government is looking into all available options to cushion the effects of rising oil prices,”
Duterte’s closest aid said.

To his credit, President Duterte said he was willing to put on hold the upward adjustments in the excise tax on oil.

Meanwhile, Finance Assistant Secretary Tony Lambino said Duterte made an early announcement on the suspension to “anchor inflation expectations.” He said the current price and multiple estimates of crude prices over the next two months show that the average price would stay above the $80 threshold. Therefore the suspension mechanism will be activated,” Lambino said in a statement.

“The president is making an early announcement of the temporary suspension of the January 2019 oil excise increase under the TRAIN Law. This announcement is being made two months before the time required by law, to proactively anchor inflation expectations and enhance the welfare of the Filipino people,” he added.

Go noted that the Dubai crude average breached $77 in September. If the average increases in the next three months to more than $80 per barrel, the government would consider suspending the increase in oil excise taxes come January, he added.

Lambino on the other hand said that Duterte was confident that the announcement on the suspension of excise tax increase would help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation.

“The prices of basic goods have gone up and the government recognizes that those who have been affected the most are poor Filipino families who likewise need the most help,” the finance official said.

Lambino added, ”It is for this reason that the president issued Administrative Order 13 and a series of Memorandum Orders to stabilize prices and the supply of basic agricultural products for all Filipino consumers.”

“If you will analyze the food versus non-food, you would see that the food is accelerating while non-food is decelerating in terms of the inflation rate. So that’s why the economic development cluster prioritized immediate actions to bring down the prices of food by increasing supply.”

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https://thephilbiznews.com/2018/09/25/after-blaming-us-president-donald-trump-duterte-now-blames-oil-prices-for-high-inflation/

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