THE DEPARTMENT of Finance (DoF) said that reimposing the fuel tax hike scheduled for 2019, which the government has committed to suspend, will be reviewed at any three-month period that year rather than during the fourth quarter.
The DoF is currently drafting the implementing rules and regulations of the suspension of the fuel excise tax for 2019, as well as the guidelines on how the government will reimplement the hike.
“We will then check if at any point in time the rolling average of three months will be lower, then we will review it at that time,” Finance Secretary Carlos G. Dominguez III told reporters Monday on the sidelines of the hearing for the DoF’s budget for 2019, referring to the trigger price of $80 per barrel for the Dubai benchmark. By law, the fuel excise will be suspended if the average price hits or exceeds $80 over three months.
Mr. Dominguez clarified concerns that the review to reimpose the scheduled tax hike in 2019 will start in the last three months of that year.
He said that the fuel hike will be enforced when the benchmark crude price for Asia averages below $80 per barrel over three months.
Asked whether the review will start during the first quarter, he said: “Yes. Because it has to be three months if you follow the law. So we will review it.”
The Tax Reform for Acceleration and Inclusion Act (TRAIN) law, which took effect in January, raised fuel excise taxes by P2.50 per liter this year and is scheduled to collect another P2 per liter in 2019 and P1.50 in 2020, for a total P6/liter excise tax hike.
Malacañang announced the suspension last week well ahead of the three-month trigger period, as Dubai started to exceed $80 only in late September. The Palace said it was seeking to temper inflation expectations for the new year, after inflation hit 6.7% in September.
Mr. Dominguez during the hearing yesterday also touted the TRAIN law’s contribution to government revenue.
“The TRAIN Law, which was implemented at the start of 2018, contributed P26.6 billion in revenue for the first seven months of the year, (against) losses from personal income tax reduction totaling P70.8 billion,” he said.
“This means we were able to fulfill our commitment of putting more money into people’s pockets,” he added. — Elijah Joseph C. Tubayan
