Camarines Sur Rep. Luis Raymund Villafuerte on Monday asked Congress to hasten the passage of three measures that mandate tax reductions to pull down the cost of power and petroleum products.
Villafuerte said passage of the measures will help the people cope with elevated inflation.
The lawmaker pushed this price-cut proposal as oil companies raised last week the pump prices of gasoline and diesel for the sixth time in six weeks amid rising global demand and continuous supply cuts by Saudi Arabia, the world’s biggest oil exporter.
In House Bill (HB) 8231, Villafuerte, sought the amendment of various sections of the National Internal Revenue Code (NIRC) of 1997 by imposing a temporary suspension for three years of, or a 50 percent cut on, certain tax payments, to lower electricity rates and the retail prices of fuel products.
“This proposed measure seeks to reduce the excise tax on petroleum products and coal by 50 percent, suspend the imposition of applicable duties on their importation, and exempt the system loss charge in the sale of electricity from the value-added tax (VAT), for a period of 3 years,” Villafuerte said.
He filed HB 8241 “in a bid for the 19th Congress to mitigate the effects of the imposition of VAT and the increased excise taxes on petroleum products and coal that are too much of a burden on the consumers and businesses as we recover from the effects of Covid-19 and elevated inflation.”
Villafuerte’s bill was referred by the leadership of the House of Representatives to its Committee on Energy for study before the Congress adjourned sine die last June 2.
The Congress reopened for its Second Regular Session last July 24.
HB 8231 proposes to amend Section 109 of the NIRC by exempting from VAT payment the system loss charge in the sale of electricity for three years from the date of effectivity of this Act.
It also wants to amend Section 148 of the NIRC by reducing by 50 percent for three years the excise tax payments on petroleum products.
Moreover, it aims to cut by half, also for three years, the excise taxes on coal, and to suspend for the same period the collection of applicable duties on imports of coal and petroleum products.
To shield consumers and motorists from oil price spirals, Villafuerte had introduced House Bill (HB) 5176 to make permanent the temporary provision in Republic Act (RA) 10963—the Tax Reform for Acceleration and Inclusion (TRAIN) Law—that stopped the previous administration from collecting the excise tax on fuel products whenever the average per-barrel cost of Dubai crude oil, based on the Means of Platts Singapore (MOPS) rate, reached $80 over a three-month period prior to the planned suspension of the tax collection.
The TRAIN Law’s provisional authority to suspend the fuel excise tax whenever the $80 price cap is breached ended in 2020.
