Solon pushes for VAT reduction on fuel

BACOLOD CITY, Philippines  — The reduction of Value Added Tax (VAT) on fuel products is a long-term solution to help Filipinos cope with the rising prices of goods and basic commodities, and a better solution than fuel subsidy.

This was the contention of Rep. Alfredo Abelardo Benitez (3rd district, Negros Occidental) Saturday as he urged President Aquino to order a reduction of VAT on fuel products and certify this matter as "priority bill" for Congress to act on it immediately when it will resume session on May 9. 

He said there are similar bills, filed in Congress before adjournment, to bring down VAT on fuel products. "I will support the bills calling for the legislation of reduction of taxes on fuel products," he said. 

Benitez said he would rather choose the reduction of VAT on fuel products than fuel subsidy because there could be a problem on the implementation of the latter.

The subsidy goes through government agencies and who knows what happens in the implementation process, while VAT reduction would be a straightforward process of reducing the prices of oil products which, in turn, reduce prices of goods and basic commodities.

"The prices of basic commodities are based on fuel prices. If we lower the taxes on oil products, the result would be lower prices of basic commodities," he said.

Governor Alfredo Maranon Jr. is also in favor of reduction of VAT on fuel products.

Last week, President Aquino signed Executive Order 32, entitled "Instituting the Public Transport Assistance Program (PTAP)-Pantawid Pasada," providing fuel subsidies to tricycle and jeepney drivers, and allocating P450 million from the special funds of the Department of Energy to finance it.

On the big disparity on fuel prices in Bacolod than those in other cities, Benitez said he will file a resolution investigating the matter in aid of legislation.

"There has to be a difference because of transport costs but why that big?" Benitez asked in reference to the P4.50 to P5 per liter disparity in prices of fuel products in Bacolod and Negros Occidental compared to those in Cebu, Dumaguete and Manila. 

Benitez said the transport costs from Manila, where oil depots are, to different cities are expected to vary, but the Bacolod price difference is higher than it should be.

"We will look into several things, including what companies transport the fuel to Bacolod, and if the margin of price costs is justified. We will also find out whether some transport or other groups or private entities are taking advantage of the situation," Benitez said.

The congressman added that he will also look into the alleged cartelization being done by oil companies in Bacolod.

The Metro Bacolod Chamber of Commerce and Industry and the transport sector, in a meeting with Energy Undersecretary Jose Layug Jr. last March 30, went home disappointed with the failure of the government official to address their concerns on high fuel price disparity. (FREEMAN)