Barbers, Lagman hit the brakes on TRAIN’s excise fuel tax hike

A pro-administration lawmaker on Thursday sought the repeal of the excise tax imposed on fuel under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Law.

House Bill 8369 by Surigao del Norte Rep. Robert Ace Barbers seeks to amend Section 43 of the TRAIN Law that imposes excise taxes on all petroleum products and to revert to the old rates based on the National Internal Revenue Code.

“Prices of fuel have increased significantly and will be much higher on the next tranche of implementation of TRAIN in 2019 and 2020,” Barbers said. “The increase in fuel prices affects the prices of basic goods and services as producers or manufacturers may pass production costs to consumers.”

He said while the objectives of the TRAIN Law are laudable, it should be adaptable to change, especially now that prices have gone so high.

“As legislators, it is our duty to hear the cry of the poor,” he said.

Albay Rep. Edcel Lagman, meanwhile, urged House leaders to expedite the approval of Joint Resolution 27, which seeks to suspend increases in the excise tax on fuel under the TRAIN Law to tame inflation, which rose to a nine-year high of 6.4 percent in August.

Lagman said that “it is patently a flawed policy for the Philippines, an oil-importing country, to impose additional and higher excise taxes on petroleum products, while oil-producing countries are even giving subsidies to maintain at low levels the pump prices of gasoline to protect consumers.”

The situation is compounded by the increasing price of oil in the world market, which has breached the $80 per barrel mark, the highest since November 2014, he added.

Lagman said assurances from the government’s economic managers that inflation is manageable would not lift the burden of spiraling prices of goods and services on the public, particularly the poor.

There were moves against the TRAIN Law in the Senate as well.

Senator JV Ejercito renewed his call to the country’s economic managers to put on hold the next tranche of excises taxes on fuel due to rising inflation and global oil prices.

“I urge our economic managers to consider postponing the next round of increases in excise taxes this January 2019,” Ejercito said in a statement.

“With crude oil at $83/barrel and a 6.4 percent inflation rate, we need to soften the impact [of TRAIN] on our people,” he added.

Ejercito first issued his call in May after he and other senators expressed concern over the inflationary effects of the TRAIN Law.

Ejercito noted that the law allows or the suspension of increases in the excise tax if the price of oil stays at or above $80 a barrel for three months.

Senator Paolo Benigno Aquino IV had earlier called for a stop to the additional excise tax on fuel, saying the government should halt the P2 levy on oil products come January 2019 and help alleviate the impact of the rising prices of petroleum products.

”Let’s call on the DOF [Department of Finance] to issue clear and actionable guidelines, timelines, rules and regulations on how the suspension can possibly work,” Aquino said.

“It’s only Round 1 of the increase in excise taxes under the TRAIN Law and the poor are getting pulverized,” Aquino said in Filipino. “By Round 2, they could be knocked out.”

Aquino has proposed Senate Bill No. 1798, which suspends the collection of excise taxes on fuel once the rate of inflation breaches the annual inflation target over a three-month period.

Topics: Tax Reform for Acceleration and Inclusion Law , Rep. Robert Ace Barbers , National Internal Revenue Code , Rep. Edcel Lagman
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