DOF continues to buck suspension of excise taxes on fuel

The Department of Finance (DOF) on Tuesday maintained that it is opposed to the suspension of excise taxes on fuel, amid the successive price hikes due to the ongoing conflict between Russia and Ukraine.

According to Finance Assistant Secretary Paola Alvarez, the overall suspension of all excise taxes and value-added taxes on fuel will lead to revenue losses worth P138.8 billion or 0.6% of the country’s gross domestic product.

Her remarks come after several proposals in Congress to suspend the excise taxes on fuel, with the country now recording 11 straight weeks of increases in pump prices of petroleum products.

Alvarez noted that the country would lose some P48.7 billion should excise taxes be suspended from June to November as proposed by the House of Representatives, and lose P69.3 billion if suspended from June to December as proposed by the Senate.

Revenue losses could reach as high as P1.5 trillion should the suspension be implemented for the next 10 years through 2022.

“HIndi po tayo sang-ayon sa pagsuspinde ng excise taxes kasi po malaki po ang mawawala sa ating kaban o sa ating pera sa treasury ‘pag ginawa po natin yan,” she said during the Laging Handa briefing.

(We do not agree with the suspension of excise taxes because we will incur huge losses in our coffers or in the funds in the treasury if we do that.)

The Bureau of the Treasury (BTr) just on Monday borrowed P9.137 billion through the issuance of Treasury bonds — P3.037 billion from the 91-day tenor, P3 billion from the 182-day tenor, and P3.1 billion from the 364-day tenor.

All tenors were oversubscribed with P23.35-billion worth of tenors versus the total offer of P15 billion.

Alvarez defended the need to implement excise taxes, as she said revenues raised from these are used to finance the government’s social services and infrastructure spending.

“Ang paglabas natin sa pandemya kailangan po talaga nating i-push ‘yung economic growth at government spending. Kung hindi po, maapektuhan talaga ang pagbalik natin sa ating ekonomiya bago ang pandemya,” she said.

(To come out of the pandemic, we really need to push for economic growth and government spending. If not, this will affect our return to pre-pandemic economic levels.)

The Finance official also noted that the excise taxes are targeted mainly to the higher income households which account for 48.8% of fuel consumption in the country.

The Department of Energy (DOE) has maintained that the ongoing conflict between Russia and Ukraine has hit global prices, which in turn impacted domestic prices.

Latest DOE data show that year-to-date adjustments stood at a total net increase of P13.25 per liter for gasoline, P17.50 per liter for diesel, and P11.40 per liter for kerosene as of March 8, 2022.

The same data revealed that prices in Metro Manila range from P59.85 per liter (Caloocan) to P84.55 per liter (Muntinlupa) for gasoline, and from P55.20 per liter (Pasig) to P73.39 per liter (Taguig) as of March 10, 2022.

For its part, the government has allocated some P2.5 billion to provide fuel vouchers for some 377,000 qualified public utility vehicle drivers across the country, amid the successive pump price hikes.—AOL,GMA News