Pro-consumer advocacy group Laban Konsyumer Inc. expressed concern over the higher excise tax on coal and urged Malacañang to veto the implementation to protect consumers from its adverse impact.
LKI president and former Trade Undersecretary Vic Dimagiba opposed an increase in the excise tax of coal “since it violates the Constitution, and the possible spike in electricity rates that will put additional burden to every household.”
Congress has agreed to raise the coal excise tax from the current P10 a metric ton to P50 a metric ton in the first year of implementation, P100 in the second and P150 in the third and succeeding years.
LKI appealed to President Rodrigo Duterte to exercise his veto power to immediately stop the increase in tax.
LKI estimates that at P50 per metric ton, the increased coal tax will multiply spending of industries and consumers as an indirect impact.
While the excise tax on coal is lower than the Senate version, Dimagiba said the violation applies since even though there is a coal tax now, Congress did not initiate the amendments.
The Tax Reform for Acceleration and Inclusion bill will take effect on January 1, 2017 once the President signs it by the middle of this month.
“We might be optimistic now, but next year we will all have to watch for the actual effects of TRAIN, the implementation of which is imminent in January. I think there will be a belt-tightening. Consumers can be smart by using their right to choose what they buy,” Dimagiba said in a statement.
Aside from the impending increase in electricity rates, prices of cement will also be affected by the reform on coal tax.
“Because cement manufacturers use coal to burn their kiln and also as the share of their power. We project that up to P9 will be added from the current price of each sack of cement once the bill is passed,” he said.
LKI said at P150 per MT, small-to-medium businesses will be burdened with additional expenses.
It said larger businesses that compete in the global economy would also be affected.
“At P150/MT coal tax, large local semiconductor companies will still be rendered less competitive, with their bills going up. Office buildings hosting BPOs will be similarly affected, with electric expenses going up,” the group said.