A consumer group on Monday welcomed moves to suspend the coming increase in the excise tax on fuel and said the President should consider replacing Cabinet secretaries who contributed to high inflation.
Laban Konsyumer Inc., which had filed a case challenging the Tax Reform for Acceleration and Inclusion Law, said the suspension of the new fuel excise tax scheduled for January 2019 under the law was good news for consumers already burdened by high oil prices.
“Let’s ensure that the suspension of excise taxes includes diesel, gasoline, kerosene, LPG, bunker fuel, aviation fuel, and coal. May we add that the President consider replacing Cabinet secretaries whose behavior in the past months contributed to the high inflation,” said LKI president Vic Dimagiba.
He said government should also grant cash assistance to beneficiaries under the TRAIN Law “considering the windfall value-added tax collected by government derived from the high oil prices.”
The Finance department announced earlier that President Rodrigo Duterte is planning to suspend the second tranche of excise taxes on fuel to temper accelerating inflation.
Under the Tax Reform for Acceleration and Inclusion law, personal income taxes were slashed while excise taxes on fuel, tobacco, alcohol, and automobiles were increased.
In particular, the excise taxes on diesel fuel were increased by P2.50 per liter in 2018, while the excise taxes on gasoline were increased by P7 per liter. Aside from that, the law provides that beginning next year, excise taxes for diesel will be increased by P4.50 and gasoline by P9 under the second installment of the law.
Higher oil prices, together with faster increases in the prices of rice, meat, fish, and vegetable were the main reasons for the accelerating inflation that averaged 5 percent in the first nine months of the year.
Inflation in September further accelerated to a nine-year high of 6.7 percent from 6.4 percent in August. The average 5-percent inflation in January to September was well over the 2 percent to 4- percent target range earlier set by the Bangko Sentral ng Pilipinas.
Senators belonging to both the majority and minority also lauded the suspension of the second round of excise taxes on oil.
“We commend the President and his economic managers for staying sensitive to the plight of our people and adjusting with the times,” said Senator Juan Edgardo Angara.
Angara, chairman of the Senate ways and means committee, said this is the right decision given the high and continually rising price of oil worldwide.
Senator Grace Poe said the time to suspend the increase in the excise tax was now, not in January 2019. She added that this is allowed by the TRAIN law.
Senator Paolo Benigno Aquino IV welcomed the suspension as well but said there was more work to be done.
He has filed a bill calling for a rollback of the excise tax on fuel that began in 2018, to the rates on Dec. 31, 2017.
In the House, two militant lawmakers also welcomed the suspension of the second tranche of excise taxes on fuel.
At the same time, Reps. Antonio Tinio and France Castro of ACT Teachers party-list, members of the Makabayan bloc, called for the passage of a House bill that repeals the excise tax under the TRAIN law altogether.
Finance Secretary Carlos Dominguez III said over the weekend the P2 per liter increase in excise tax originally scheduled to take effect on Jan. 1, 2019, will be put on hold. The increase shall bring the total excise tax on gasoline from P7 to P9 per liter, and on diesel from P2.50 to P4.50 per liter.
“Since the implementation of the TRAIN Law in January 2018, fuel prices have already increased by as much as P10.50 per liter for gasoline, P12 for diesel, and P14.12 for kerosene,” Tinio stated.
“Filipinos are in need of immediate and concrete solutions that would solve the never-ending price hikes. The Duterte administration has been occupied with formulating a ‘Red October plot’ the past month while ignoring the immediate economic problems of the Filipino people,” he added.
READ: Government to slash non-infra budget after oil tax freeze
