MANILA – The second tranche of excise taxes on oil products will be temporarily suspended, in efforts to anchor inflation expectations, a government official said Sunday.
In a statement, Finance assistant secretary Antonio Joselito “Tony” Lambino II said the that government will put the excise tax increase – which had been scheduled to go into effect in January 2019 – on hold.
“As announced by Bong Go, the President is making an early announcement of the temporary suspension of the January 2019 oil excise increase under the TRAIN Law,” he said.
The Special Assistant to the President had earlier announced the suspension on Sunday during the opening ceremony of TienDA Malasakit Store in Taguig City.
“Meron pong pinirmahan ang ating Pangulo at effective po ito sa January po. ‘Yun suspension ng excise tax P2 po mula Enero para makatulong po sa pagtaas ng fuel,” Go said.
Go clarified the suspension is applicable only to the second tranche following the Senate resolution for the suspension of the excise tax. The first tranche imposed in January 2018 remains.
“Effective January pa po ‘yung magiging suspension. Ina-anticipate lang po natin sakaling hindi po mapigilan ‘yung presyo ng crude oil sa market. He [President Rodrigo Duterte] is very concerned talaga dito sa pagtataas ng presyo ng langis,” Go added.
Signed into law in December 2016 by President Rodrigo Duterte, the Tax Reform for Acceleration and Inclusion (TRAIN) expanded the value-added tax (VAT) base and reduced personal income taxes (PIT) starting January this year.
Under the law, excise taxes on diesel fuel were hiked by P2.50 per liter this year, excise taxes on gasoline were hiked by P7.00 per liter.
The law also provides that starting 2019, excise taxes for diesel will be hiked by P4.50 and those of gasoline by P9.00 under the second tranche.
The increase, however, could be temporarily suspended should the average price of Dubai crude reach or exceed $80 per barrel for three months.
“Today’s price and multiple estimates of crude prices over the next two months show that the average price will stay above the $80 threshold, and it is therefore being announced early that the suspension mechanism will be activated,” explained Lambino.
“This announcement is being made two months before the time required by law, to proactively anchor inflation expectations and enhance the welfare of the Filipino people,” he elaborated.
Inflation was recorded at 6.7 percent in September, the fastest in over nine years since it clocked in at 7.2 percent in February 2009.
This is faster than the full-year target range of 2 to 4 percent set by the Bangko Sentral ng Pilipinas (BSP).
“After consulting the leadership of both the Senate and the House of Representatives, as well as the economic team, the President is confident that this course of action will help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation,” Lambino said.
According to the latest available data from the Department of Energy (DOE), gasoline prices in the country currently range from P53.55 to P67.35 per liter, diesel from P47.05 to P56.35, and kerosene from P51.17 to P61.30.
Last week, DOE assistant secretary Leonido “Bodie” Pulido III said they were going to write the Department of Finance for the possible suspension of excise tax on fuel after international oil prices breached $80 per barrel. (GMA News)
