Excise taxes on petroleum products will further increase in January 2020 in the third year of the implementation of the Tax Reform for Acceleration and Inclusion law.
Officials of the Oil Industry Management Bureau will meet with the oil companies to ensure their compliance with the TRAIN law, according to Energy Undersecretary Jesus Posadas.
Posadas said the oil companies should follow the standard protocol for their compliance with the higher excise tax rates for petroleum products.
He said the oil companies should first exhaust their 2019 inventories prior to imposing the higher excise tax on newly-procured products in 2020.
Only new inventories in 2020, directly imported or locally produced by refineries, are covered by the third tranche of excise tax, he said.
“That’s always the protocol. For the additional excise tax, they would have to exhaust the oil inventories first,” Posadas said.
Under the TRAIN law, an additional excise tax of P2.50 per liter was imposed for diesel in 2018. This went up to P4.50 per liter in 2019 and P6 per liter in 2020.
The law also increased the excise tax for unleaded gasoline from P4.35 per liter to P7 per liter in 2018, P9 per liter in 2019 and P10 per liter in 2020.
The Energy Department said it would monitor and inspect the retail stations for their compliance with the law. It issued show-cause orders in January last year to oil firms for implementing the higher taxes prior to the depletion of old inventories.
“We are ensuring that our consumers do not become subjects of profiteering,” Energy Secretary Alfonso Cusi said earlier.
The agency said the level of inventories varies depending on the status of individual depots and retail outlets and product turnover.
“The funds to be raised from these collections will be invested to the people through key infrastructure projects, intensified social development and other priority projects of the government,” Cusi said.
“I hope that every Filipino will be supportive of government causes. Also, let us remain vigilant and work together for utmost consumer welfare promotion,” he said.