MANILA: With oil prices recovering and going up in the world market, the Duterte administration is bent on imposing additional taxes on fuel products on top of the 12 percent value-added tax (VAT).
Among the products covered by the plan are diesel, used by most passenger buses and jeepneys, which will be imposed a tax of P6 per liter, as well as cooking gas and bunker fuel for generating electricity. The tax on gasoline will also be raised from P4.35 to P10 per liter.
Budget Secretary Benjamin Diokno told ABS-CBN News Channel yesterday that the administration needs additional revenue to finance its ambitious infrastructure program, which he said would cost from P8 trillion to P9 trillion during President Duterte’s six years in office.
“There is no excise tax on diesel, though it is subject to the 12-percent VAT like other oil products. I think this should be corrected,” Diokno said. He said people could afford the P6 tax “because they have been enjoying low diesel prices as a result of cheaper crude in the world market.”
“They will also have more money when we reduce the income tax,” he said.
Diokno noted that crude oil prices used to be in the $120-$130-per-barrel level. Now they are below $50, he said. Crude prices, however, have rebounded as oil exporters reduced production. Pump prices have been raised several times in the past weeks in the Philippines.
Diokno said the behavior of people has changed with low diesel prices. “Even the rich have shifted to diesel-fed SUVs (sport utility vehicles),” he said.
Aside from the P6 tax on diesel, the Duterte administration is proposing to tax other oil products, including bunker oil, which is used for producing electricity, cooking gas, kerosene and aviation gas.
The Department of Finance (DOF) has submitted the tax proposals to the House of Representatives. The DOF is also proposing to remove certain tax exemptions senior citizens and persons with disability enjoy. Additionally, the finance department wants to collect more levies for car buyers.
Diokno said the administration is aiming for a “net gain” of P200 billion from its tax proposals after offsetting revenues expected to be lost from lower income tax. That means that taxpayers would be made to cough up an additional P200 billion a year in tax payments.
Congressmen have criticized the tax proposals as “anti-poor.” Marikina Rep. Romero Quimbo, former chairman of the House committee on ways and means, said, “What the administration would give with its right hand (in terms of lower income tax), it would take away with its left hand. In fact, people would pay more in terms of higher and new taxes.”
“They want to withdraw the tax exemptions of senior citizens and persons with disability. They will tax diesel, which public and most transport vehicles use. They will tax cooking gas. They want to collect higher tax on gasoline and cars. These levies will hit not only the middle class but low-income earners as well,” he said.
