posted July 17, 2016 at 11:57 pm by Gabrielle H. Binaday
The Finance Department will likely
push through with a plan to increase the excise tax on fuel products amid the
slump in global oil prices.
Finance Secretary Carlos Dominguez
III told reporters it was about time to adjust petroleum taxes following the
soft oil prices in the world market.
“Besides, now is the time to do it,
because the price [of fuel] is low,” Dominguez said.
The DoF is studying several
proposals to raise fuel taxes.
“We have to [adjust], because [the
last adjustment] was set in 1997. It’s P4.50, something like that since then.
P4.50 then [is] not worth as P4.50 right now. So we have to adjust it, at least
to index it,” he said.
Petroleum products are taxed in
varying rates, ranging from an exemption to P4.50 per liter.
The government has not made any
upward adjustment in excise tax rates since 1997 and they have been fixed in
nominal terms, reduced or eliminated.
Earlier, former Finance Secretary
Cesar Purisima recommended a Comprehensive Tax Reform Program that ncluded an
increase in excise tax on gas, diesel and other oil products.
Purisima noted that the proposal
might generate around P132 billion in revenues.
Purisima’s proposal would generate
additional revenues of P132 billion if the current excise tax on gasoline was
raised to P10 per liter and that of diesel to P6 a liter.
Purisima said the P10 per liter rate
was derived by indexing the existing excise tax rate of gasoline of P4.35/liter
by cumulative inflation factor of 2.37 (1997-2014) and applying the same amount
of increase (P5.96) to diesel.
“For simplicity and administrative
ease, the P5.96 was rounded off to P6,” Purisima said.
His proposal calls for the indexing
of the excise tax by 4 percent every year.
The same recommendation called for a
subsidy if global crude oil prices reached over $90 per barrel.
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