An oil industry executive on Tuesday asked the government to impose a specific tax on petroleum products to generate up to P75 billion in additional revenues.
Independent Philippine Petroleum Companies Association founding chairman and Eastern Petroleum Corp. chairman Fernando Martinez said in a statement there was a great opportunity to increase taxes on petroleum products.
“There is an excellent opportunity for the next administration to impose a specific tax of around P3 to P5 in all petroleum products,” Martinez said.
Martinez earlier asked the Aquino Administration in the last two years to implement the same tax, particularly when global petroleum prices plunged 40 percent.
Martinez raised issue of the specific tax with Finance officials, saying the government was estimated to generate a low of P40 billion to a high of P75 billion annually in specific taxes. The country consumes 100 million barrels of petroleum products a year.
He said the additional specific tax and value-added tax could bring the overall petroleum taxes close to P150 billion annually, enough to sustain infrastructure development and modernize roads and bridges.
“The Duterte administration can then support the tax reform agenda which includes exempting from income tax those receiving P300,000 annually and putting a cap on corporate and individual income for those earning P2 million and above to 20 percent of taxable income equivalent to Singapore but higher by 5 percent to Hong Kong’s top income rate of 15 percent,” Martinez said.
He said the Duterte administration could impose the same without fear of backlash considering the widespread benefit against the increase of petroleum products.
Martinez said the proposed specific tax in petroleum products of P3 to P5 per liter would not be enough to justify any hike in transport fares.
He said prices of diesel were expected to remain within P30 per liter and gasoline below P45 per liter.
“In 2008, gasoline prices hit P60 per liter at around $100 per barrel, while diesel was at P50 per liter, which brought the fare prices to its current rate except for the voluntary rollback called for by the transport sector,” Martinez said.
Eastern is one of the independent petroleum players in the Philippines.
