The suspension of the P2 increase in the excise tax on fuel next year may last only three to six months, a Finance official told senators Wednesday. What’s more, the fuel subsidy for public utility drivers is likely to be cut in half if the excise tax increase is suspended.
“What we are now discussing are the parameters to officially implement that and also to think the manner provided by law on when we can resume it,” Finance Undersecretary Karl Kendrick Chua told the Senate committee on economic affairs, headed by Senator Sherwin Gatchalian.
Asked if the suspension of the excise tax would last the entire year, Chua said it wouldn’t.
While the Tax Reform for Acceleration and Inclusion Law is clear when the tax can be suspended, it is less clear about when it can be resumed, he said, adding that the suspension will not cover the entire year.
“The Secretary [Carlos Dominguez] has opined that if the suspension is based on three months, then the resumption could probably be based on a three-month cycle, but that is his opinion and we are still reviewing and discussing it,” he said.
“At the very least three months suspension and we will base that on the prevailing oil price,” he added.
After the hearing, Gatchalian said he would recommend that the DOF implement the suspension for six months.
Meanwhile, Finance Assistant Secretary Tony Lambino said the planned fuel subsidy for public utility drivers may be halved with the suspension of the second round of excise taxes. Lambino said beneficiaries of the Pantawid Pasada Program may only receive a P10,000 subsidy next year, from the supposed P20,000 budget.
“The DBM has mentioned an adjustment for the fuel subsidy program. Because the excise tax will not increase in January, if we compute it, there will be a P10,000 Pantawid Pasada grant in 2019,” Lambino said in a Palace economic briefing Wednesday.
“It will be half of what has been budgeted, but it will also be doubled of what they received this year. That was the initial remark of the DBM and Secretary [Benjamin] Diokno,” he added.
The Finance department earlier said that President Rodrigo Duterte would soon order the temporary suspension of the next tranche of the fuel tax rate increase under the Tax Reform for Acceleration and Inclusion Law.
The Finance official said the economic managers’ recommendation, ordering the suspension of excise increase next year, was already submitted to the Palace.
“[Presidential] Spokesperson Salvador Panelo announced that the President accepted it, but we are waiting the official document that states that,” Lambino added.
READ: Tax freeze to curb inflation—DoF
For its part, the Land Transportation Franchising and Regulatory Board downplayed the impact of the budget slash, stressing that the intended beneficiaries will still be grateful for the subsidy.
LTFRB Chairman Martin Delgra III said fuel beneficiaries will still be appreciative of the subsidy considering it’s twice than what they received this year.
Delgra, however, said the transport agency has not reached 50 percent of the full distribution of the fuel cards.
“As of the latest, we already have distributed the total of 40.14 percent of those cards which were already printed and were already downloaded to the regions which would translate to 57,227 cards all in all,” said Delgra.
He said the distribution was held back in part by the Land Bank of the Philippines which also disburses the government’s 4Ps cash dole.
READ: Christmas food prices stabilizing—Trade