As global oil prices drop, gov’t reviews temporary excise tax halt
CLARK – Amid declining global prices, the government is reviewing the temporary suspension of the scheduled hike in oil excise taxes early next year even as it was already green-lighted by President Rodrigo Duterte, Finance Secretary Carlos G. Dominguez III said Monday.
“We are currently again reviewing it. This is a totally unexpected development, although it’s a pleasant development. I hope we have more developments like this, but we are currently reviewing the situation, especially now that prices have gone down to $55 per barrel or thereabouts,” Dominguez told reporters on the sidelines of the third leg of the Sulong Pilipinas 2018-Philippine Development Forum.
Dominguez noted that under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, global prices have to average $80 a barrel or above during a three-month period before the government can provide relief.
While prices have yet to hit that threshold, the economic team earlier recommended that the President temporarily suspend the increase in oil excise taxes at least during the first quarter of 2019 to help tame inflation after the rate of increase in prices of basic commodities reached over nine-year highs of 6.7 percent in September and October.
“We are trying to figure out a way of violating the law, actually. So it’s under review at the moment,” Dominguez said.
The Office of the Executive Secretary this month released a memorandum stating that Mr. Duterte had approved the recommendation to suspend the second installment of the increase in excise tax on fuel.
But for Dominguez, “we have to look at the facts on the ground.”
Asked if Duterte’s memorandum will push through, Dominguez replied: “Most likely we will do it, depends on the prices. Two months ago, I thought it was going to about $80 [a barrel]. The projections were $80; actually, we were wrong. The market was wrong.”
Under the TRAIN Law, an excise tax of P2.50 per liter was slapped on diesel and bunker fuel starting this year. This would go up to P4.50 in 2019 and P6 in 2020.
The excise tax on gasoline also increased from P4.35 per liter to P7 in 2018, and then to P9 next year and P10 in 2020. /kga – By: Ben O. de Vera
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.