Government can afford to suspend fuel excise tax — lawmaker

MANILA, Philippines — The government can actually afford to suspend the P1 to P2 fuel tax increase that took effect yesterday, according to congressmen belonging to the Liberal Party (LP).

Speaking for his LP bloc, Marikina Rep. Romero Quimbo said Assistant Finance Secretary Teresa Habitan had told a House hearing that the Department of Finance was projecting a P40-billion revenue loss if this year’s fuel tax hike were suspended for the whole year.

“That could easily be offset through more efficient tax collection and through the various tax measures that the House has approved,” he said.

Among the approved measures were two bills increasing levies on alcohol and tobacco products, and another bill seeking the grant of a general tax amnesty next year to thousands of delinquent taxpayers.

Rep. Michael Romero of 1-Pacman, one of the authors of the amnesty bill, said the proposed amnesty grant is among President Duterte’s legislative priorities.

“It aims to give delinquent taxpayers the opportunity to have a clean slate by paying an amnesty tax and to be fully compliant on their tax obligations moving forward,” he said.

He said based on previous amnesty grants, the government could generate tens of billions of pesos from the planned new reprieve.

“It’s a one-time grant that we hope taxpayers with delinquencies would avail themselves of,” he added.

Romero pointed out that “even if just half or one-fourth of the revenue target is collected, it would be a big boost to government resources that could fund vital services.”

He said he expects many families that have inherited properties to take advantage of the amnesty offer since the estate tax has been cut from as high as 20 percent to just six percent under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Aside from the reduced tax, the law increased the standard deduction from P1 million to P5 million and exempts a family home worth up to P10 million (the previous limit was P1 million) from the estate levy, he stressed.

The proposed amnesty would cover 2017 and prior years. An applicant would be required to file with the Bureau of Internal Revenue (BIR) an amnesty return accompanied by a notarized statement of total assets as of Dec. 31, 2017. The applicant would pay an amnesty tax of two percent of such assets. On estate tax liabilities, the amnesty levy is six percent.

Romero said he expects the planned new amnesty offer to be in place in time for the first quarter tax-filing period.

Deputy speaker and Batangas Rep. Raneo Abu said the proposed estate tax liabilities amnesty “will promote the interest of heirs in developing inherited real properties and boost revenues of local government units.

“It will also result in the updating of real property records and titles,” he said.

Mismanagement

And while Filipinos have yet to feel the impact of the second phase of TRAIN, Rep. Gary Alejano said the first part of the tax reform measure was no doubt a failure and had only highlighted the Duterte administration’s mismanagement of the economy.

“2018 has been an extra weight on the shoulders of Filipinos with prices of basic needs rising while the government seemed oblivious to these concerns,” Alejano of party-list group Magdalo said.

He said while there were more urgent problems to solve, the Duterte administration chose “to prioritize instead moves to expand power, attacks on the opposition and preferential treatment for China.”

He said the TRAIN law, which administration officials claimed was the President’s “best Christmas and New Year’s gift” to Filipinos, had “turned out to be a huge nightmare for our people.”

“There is no need for additional taxes under TRAIN as the government is awash with unused funds,” Alejano stressed.

As for Chinese aggression in the West Philippine Sea, the former Marine captain turned lawmaker said the administration “has been hesitant to file diplomatic protests and worse, has been downplaying the situation.

“Instead of asserting our claims and control in the West Philippine Sea, the Duterte leadership has only put our side to further disadvantage with agreements like the signing of a memorandum of understanding for joint exploration,” he said.

He added that Chinese promises of financial assistance “have mostly remained just that – promises.”