SENATOR Paolo Benigno A. Aquino IV asked the government how it intends to carry out the suspension of the fuel excise tax if the average Dubai crude oil benchmark remains at $80 or above in the next three months.
In a speech invoking legislative privilege on Wednesday, Mr. Aquino noted that the provision in Republic Act No. 10963 or the Tax Reform Acceleration and Inclusion (TRAIN) law requires the Department of Finance (DoF) to review and to make a recommendation, based on the assessment of the Development Budget Coordinating Committee (DBCC), to either implement or suspend the increase of fuel excise tax when oil prices breach targets.
“The question: when will they conduct the review? What will be the basis of this group to the possible suspension to the incoming increase of excise tax on petroleum products?” he said.
“The Senate must call on the DoF to issue clear guidelines, timelines, rules and regulations on how to suspend the upcoming increases on the excise taxes on petroleum products,” he added.
The TRAIN law imposes excise taxes on gasoline and diesel of P7 per liter and P2.50 per liter, respectively. Starting Jan. 1, 2019, gasoline excise tax will rise to P9 while diesel excise will increase to P4.50. The law also contains a suspension provision if the average Dubai crude benchmark is at or exceeds $80 per barrel for three months prior to the scheduled excise tax increase.
Mr. Aquino said the tax reform law should have provided the automatic suspension of the excise taxes instead of providing conditions that the DoF should review before issuing its recommendation.
“For us lawmakers and for me who suggested this safeguard, the suspension of the scheduled increase should have been automatic” once the conditions were met, he said.
“What is tragic is if we reach the price that was stated in the law, but due to the lack of review or lack of recommendation by the administration, the suspension of the scheduled increase of this excise tax will not go through,” he added. — Camille A. Aguinaldo
