The Sangguniang Panlalawigan is asking the government to suspend the 12 percent value-added tax (VAT) and excise duty on petroleum goods to relieve people’s financial hardship as prices rise due to the coronavirus disease.
Suspending the VAT and excise tax, according to board member Ryan Maminta on Tuesday, July 27, would benefit a diverse customer base, not only motorists.
Maminta, who filed a resolution regarding this, said Republic Act 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which took effect on January 1, 2018, imposes the 12 percent VAT on petroleum products and additional excise taxes of P1.00 per liter for gasoline, P1.50 per liter for diesel, and P1.00 per kilogram for household liquefied petroleum gas (LPG).
All these impositions, Maminta added, bring a total of P12 per liter for gasoline, per kilograms of LPG, and P1.68 per liter for diesel.
Excise tax impositions by the government constitute almost P10.00 and P6.00 per liter on gasoline and diesel under the TRAIN Law and also the import duties on such products being implemented.
“[The] VAT and excise tax are in the nature of indirect taxes whereby the oil companies or sellers of the petroleum products could and actually pass them to the consumers by making it part of the total purchase price, thus making the end-user as the ultimate bearer of the burden for these additional taxes imposed,” Maminta said.
Maminta also said that Sen. Bam Aquino filed Senate Bill No. 1798 or the “Bawas Presyo sa Petrolyo Bill” in May 2018 to add a safeguard to the TRAIN Law that allows for the suspension in the collection of excise tax on fuel should the inflation rate surpass the country’s predicted target for three consecutive months.
Senator Imee Marcos also proposed a one-year suspension of the 12-percent VAT on oil and petroleum products, citing another round of price hikes by oil firms, which resulted in per-liter rises of P1.15, P10, and P0.65 for gasoline, diesel, and kerosene.
“The oil price hikes due to international spikes and increasing prices in the world market, plus the additional taxes imposition results to a domino effect on the prices of other commodities such as prices of food, electricity, transportation and other goods,” Maminta said.