The government lost up to P75 billion in tariff collections from oil imports in the first nine months because of weak crude prices, Customs Commissioner Alberto Lina said Tuesday night.
Lina said collection losses due to lower prices of petroleum products hit P50 billion to P75 billion as of September this year.
“Average losses [from oil imports] were significant.[It’s around] P50 billion to P75 billion,” Lina told reporters in a roundtable discussion at Manila Hotel.
Lina said that because of the steady drop in oil prices in the global market, his agency planned to ask the inter-agency Development Budget Coordination Committee to reduce the collection target for 2016.
The DBCC set the BoC collection for 2016 at P498.7 billion. DBCC is composed of top Cabinet officials in the economic cluster.
“We will [ask for revisions in the 2016 target]. It’s too high,” Lina said.
Lina said the agency would try to meet the collection target just the same, despite the impact of lower oil prices on the agency’s collection.
“We will try [to meet the target]. Whatever the DBCC tells us to do, we will do it,” he said.
Revenues from oil products account for almost 30 percent of the agency’s collection, he said.
Lina said to make up for the deficit, the government should adjust taxes on oil imports.
“In other countries, they have a mechanism to adjust [tax rates] in case prices go down. They have a mechanism where if oil prices decline, they will adjust the ad valorem or excise tax [rates],” he said.
Lina said an executive order from the president could adjust the excise tax on oil, but the adjustment should not go beyond 10 percent.
“You cannot go beyond 10 percent. The president has the power to adjust the tariff, but not to exceed 10 percent,” he said.
The Bureau of Customs said last week collection in September fell 0.8 percent year-on-year to P32.65 billion, dragged down by the value of oil imports.
Data showed tariff collection in September fell from the P32.91 billion in September 2014. It is was also 20.6 percent short of the P41.1-billion target for the month.
Total value of imports in September decreased 5.4 percent while total volume grew 20.5 percent.
Lina earlier said collecting between P390 billion and P400 billion for the Customs was “doable” this year.
“I am okay with the P400 billion [collection], but it if it will be higher than that, then, that would be better,” he said.
The DBCC set a collection target of P436.6 billion for the agency this year.