Amid rising prices, Poe urges gov't to suspend fuel excise tax

MANILA, Philippines — Sen. Grace Poe on Friday urged the government to suspend the excise tax on petrol under the tax reform law as the public continues to reel from the increasing prices of goods and services.

Poe, the chairperson of the Senate committee on public services, made the recommendation after her panel conducted a public hearing in Iloilo City on the effects of the Tax Reform for Acceleration and Inclusion law on utilities and transportation costs.

“We will ask the Department of Finance and other government agencies to study carefully the suspension of excise taxes on fuel because of the continuing increase in the prices of petroleum products,” Poe said in Filipino in her closing statement at the hearing.

“As a form of help for our countrymen, especially the poor, the agency should study the suspension of the full implementation of the TRAIN law, particularly the excise taxes on fuel, because many products have been affected,” she added.

On Wednesday, Sen. Paolo Benigno “Bam” Aquino called on Congress to amend the TRAIN law to allow for an inflation-based trigger that would allow the suspension fuel excise taxes.

He said that suspending the collection of the excise tax on fuel 2019, as Malacañang suggested, would be a little too late amid the continuing rise of prices.

“Next year is too late. Our countrymen are suffering too much because of the rise in the prices,” he said.

He said that the suspension of the collection of petrol taxes should be done once the inflation rate for the past three months already exceeded government estimates.

Inflation for the month of April was already the highest in five years after it reached 4.5 percent. This pushed the year-to-date inflation to 4.1 percent, higher than the 2 to 4 percent target of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines).

Senate President Pro Tempore Ralph Recto, meanwhile, said that the TRAIN law already had a “self-executory” tax-freeze provision in the event of exorbitant fuel prices.

He said that the tax-freeze provision would come into effect once the benchmark price of crude oil reached $80 per barrel.

During the hearing, Poe was told that since December 2017 prices of petrol had already risen by 30 percent or at least P10 for diesel and gasoline on Panay island.

Poe said that this translated into additional P2,600 in monthly expenses for farmers and P3,640 for ordinary workers.

She added that drivers had been forced to stay longer on the road to cover the additional costs.

Since the law’s implementation on Jan. 1, 2018, the average price increase has been P8.07 for gasoline, P8.95 for diesel and P9.15 per liter for kerosene, based on data from Poe’s office.

In Manila, the operator of the Light Rail Transit-1 is seeking an average of P5 to P7 increase in fare costs, a move that Poe is also asking to defer.